The integration of artificial intelligence (AI) into children's toys has transformed interactive play, increasingly used for learning, leisure, and socialization. This article examines the evolution of AI in toys, exploring both its potential benefits and emerging concerns. A systematic review of 13 academic prototypes evaluates their features, purposes (e.g., learning, therapy, leisure), and usability tests, providing a comprehensive overview of the field. Additionally, the article conducts an industrial mapping of 91 AI toys released from November 2015 to January 2024, offering insights into the current market landscape. Based on Piaget's Theory of Cognitive Development, the study suggests that AI toys can enhance cognitive and social-emotional development, particularly in STEM skills and early digital literacy. However, it identifies a critical gap between the rapid growth of AI toys and the limited academic research on their educational value. This disconnect impedes independent assessment of industry claims, especially regarding emotional AI. This article concludes by emphasizing the need for interdisciplinary collaboration and the development of regulatory frameworks to ensure the ethical design, marketing, and use of AI toys.