The Insatiable, Inflatable Candylion (SWALEC Stadium, Cardiff)

Gruff Rhys’ seminal album ”Candylion” inspires an immersive production combining a theatre show and a sing-a-long music gig

There's trouble in Pixel Valley. If its amalgamated animals – Polar Pear, Meringutan and Dalmon (half-dalmation, half, er, lemon) – all got along, it was because they worked together to harvest the pixel fruits and shared the crop equally. Only Candylion, the smallest of the bunch despite her pink spun-sugar mane, spots an opportunity to streamline production. She puts her friends to work on the factory floor.

Two years ago, National Theatre Wales teamed up with Super Furry Animals frontman Gruff Rhys to stage his electro-pop album Neon Neon: a biography of the radical communist publisher Giancomo Feltrinelli. The politics of this theatre-gig are pretty similar, only repackaged for the over-fours using the delirious style of an extreme sugar-high with Rhys and his band (the drummer's a prickly eight-legged Cactopus) rolling through his acoustic album of the same name.

Candylion herself (Remy Beasley) is the ultimate fat cat: the more pixel candy she produces, the bigger she gets, but the more of Pixel Valley – or Candytown as she renames it – she needs to consume. Starting as a spindly puppet, she literally balloons to the size of a bouncy castle. (That's inflation for you…)

There are neat allusions here: the "cycle of violence" that Rhys sings of sees Pixel Valley's proles get home blistered and exhausted, and, having devoured the Poorly Pillow ("free at the point of use"), Candylion moves into politics, running for mayor in a bright pink military uniform that stains the whole town. It's left to Matthew Bulgo's Caruin – half penguin, half carnation – to waddle his way to revolution.

Candylion uses the aesthetics of inanity against itself – and Laura Hopkins' confections are a real treat. All that In the Night Garden nonsense, that Boohbah bullshit – big eyes and bright colours – is taken off the tellybox, off the shelves of Toys'R'Us, and repurposed as all-out, anti-capitalist agit-prop. The Communist Manga-festo, if you like. It's a sly move: not only smuggling radical ideas inside cuddly toys, but nudging the language of neoliberalism into meaningless gibberish at the same time. Rather than Tubby-bye-bye and Tumbletoast, we get 'trickle down' dances and turbo-capitalism.

All of which is well and good, but Candylion loses its intended audience. Too much of Wils Wilson's production is too small for the space and the sightlines for small people are dreadful. The kids are quite happy chucking inflatable pixels around, but they're not really watching the action, still less tuning into its socio-economic critique. And without that, really, what's the point? You end up with a room full of grown-ups in on an ironic joke, revelling in the infantilism of it all. This is a charade of children's theatre: a show for adults to enjoy while pretending to be both good parents and good citizens. Partizens, perhaps?

The Insatiable, Inflatable Candylion runs at the SWALEC Stadium in Cardiff until 2 January.