"The LEGO Group increases its market share"

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LEGO has just published its Annual Report for 2010; you can read the full Press Release here.

Some of the highlights are:

  • In a global toy market making a slow recovery the company succeeded once again in capturing market shares and is now the world’s fourth largest toy manufacturer. Its global market share rose from 4.8% at the close of 2009 to approx. 5.9% at end 2010.
  • The result is extremely satisfactory and is due in part to vigorous growth in markets such as the USA, UK, Russia and Eastern Europe, all identified as growth markets for the company,” says CEO Jørgen Vig Knudstorp.
  • The Group has been capturing market shares in all its markets, and although Europe is the part of the world in which consumers already own most LEGO® bricks, growth has been double digit in most European countries, too.
  • Classic ranges such as LEGO City, LEGO DUPLO® and LEGO Star Wars™ were especially popular with consumers in 2010 but virtually all product lines sold more than expected.
  • The new online game LEGO Universe, which reached the market towards the end of 2010, did not live up to its initial sales expectations and had only a limited effect on revenue.
  • During 2010 the LEGO Group continued the process of recent years of expanding its production and warehousing capacity. A new warehouse was built at the factory in Kladno, Czech Republic, and a new moulding shop is under construction at the factory in Monterrey, Mexico. ...
  • To meet the needs of increased production and rising sales, the LEGO Group has increased its workforce to an average of 8,365 full time employees. This is a sharp increase of 1,079 full time employees compared with 2009.
  • In 2011 a modest growth is expected in the global market for traditional toys, and the LEGO Group also expects sales to increase during the year – although not at the rate enjoyed in 2010.
  • Jørgen Vig Knudstorp says: "We expect growth both in our primary markets in North America and Europe and in emerging, rapidly growing markets, including China. Our classic product lines as well as new themes such as LEGO Ninjago have got off to a good start in the new year.”

38 comments on this article

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By in United Kingdom,

Come on, if Star Wars is so popular, make more sets! I really think they should be releasing sets every 3-4 months, not just a Summer Wave and Winter Wave! And I like the sound of the new moulding shop, that tells us that hopefully they will be making even more complex moulds (a new assortment of weapons and helmets for Star Wars anyone?)

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By in Ireland,

If it weren't for lego star wars lego wouldn't be as popular as it is now and you all know it

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By in United Kingdom,

If it wasn't for Star Wars LEGO, the company would probably have gone bust in ~2005. The company was going down the drain pretty quickly in the early 2000's & it's only Star Wars & Bionicle that helped them recover once they cut their costs.

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By in United States,

Gott agree with the posts before me: if it wasn't for Star Wars, LEGO would have died off. The theme has really proven to be their cornerstone marketing line. I personally love the theme, but lately I've gotten sick with all this Clone Wars junk. As a side note, fourth largest toy maker!? Wow! That's an accomplishment, especially in this economy. I would think 2 of the other 3 companies would include Hasbro and/or Fisher Price.

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By in New Zealand,

I must agree. I had a more than ten year break from Lego and it was Star Wars that brought me back. I'd love to see alot more from the original trilogy though. Please.

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By in United Kingdom,

Apparently -
1. Mattel (inc. Fisher-Price, Hot Wheels, Barbie, etc.)
2. Hasbro (inc. GI Joe, Play-Doh, NERF, Milton Bradley & Parker Bros. games, D&D, M:TG, etc.)
3. Bandai Namco
4. Lego

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By in Ireland,

@PaulTR Right there with you on the Clone Wars, I'm not a fan of that side of the franchise, especially the faces of the characters which I find really ugly. But I suppose it's the Clone Wars animated series that's keeping Star Wars alive in the eyes of the younger audience at the moment, with it being produced "in the now". I'd actually be in favour of a new trilogy of movies or a live-action TV series being made just to offset the whole need for making sets based on Clone Wars.

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By in United States,

Well, that's good, huh? The only thing that bothers me is the fact that Hasbro is above LEGO. When I found out that they're launching their own brick building brand I decided to bring the Hate Factor on Hasbro to really high.

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By in Israel,

Ya know what, if LEGO is making so much money maybe they could lower the prices of their sets a little.... ._.

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By in United Kingdom,

It's basic economics - if you're selling all the product you can make, you've priced it too cheaply. Increase the price until demand starts to fall off. That's how you make the most money. That's what they are doing, but instead of just pocketing the profit, they are reinvesting most of it in the company - new production facilities, R&D, etc. We'd all like LEGO to be a less costly product, but the only way that'll happen at the moment is if we stop buying it ...

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By in United States,

The more pressure put on LEGO to lower prices, the more they will look at lowering their costs. In other words, cheaper LEGO sets made in East Asia.

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By in Philippines,

Hooray for Star Wars!

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By in Canada,

Eventually as a kid I stopped buying Lego... until one day in my early teens I saw an Imperial Star Destroyer in TRU and I just had to have it. Ever since I started 'collecting' and now I've spent over $15,000 on Lego. Lego also sells really well in Canada although what some of the European marketers won't know is the trouble between shopping in the US and Canada. Since the economy plays a huge role in the Canada-USA bond people in Canada are looking for lower (USA) retail prices because our dollar has past theirs. Of course things still cost upwards of 25% more in Canada despite all that. My point is that many smart Canadian buyers are starting to order from the US. This messes up sales everywhere in North America.

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By in United Kingdom,

@ aplbomr79 I sure hope they don't make too many of their products in East Asia, the quality is terrible, think I'd rather pay more for the sets

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By in United States,

I'm glad to see lego is hiring more people. It's a good feeling to know that my excessive spending on Lego products gives back in giving more people jobs.

I really don't mind the prices. But truth be told, I don't purchase unless I know I can get a good deal.

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By in Canada,

@ Brix - I agree. I'd much rather pay more for a product made with quality... because I take great pride in my Lego collection. Lego should also take pride in their product and produce the best quality bricks. As far as main stream sets go though, I still think Lego seeks to improve its quality rather than find short cuts. I don't think we need to worry about Lego moving full lines to Asia... They love their product too much to throw it away.

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By in United States,

LEGO Star Wars is now considered a classic? Wow.

LEGO Star Wars isn't what saved the company, LEGO completely lost it's way and started making sets with 5 huge pieces. Once they returned to the brick is what saved the company. Star Wars just gave them more money to fix their huge mistakes.

And people need more Star Wars sets? LEGO makes more Star Wars sets than any other theme, besides maybe City, but City has promos and such. Just go through Brickset and you will see Star Wars has more sets than any other theme. This year Star Wars has 24, City has 24, Atlantis has 5, PQ has 6-7, AI has 7.

The price of LEGO is insane, however with all the awesome $5 and $10-$12 sets this year I don't mind at all. I'll just stick to the small sets.

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By in United States,

Yeah, I was taken a bit aback too with the "classic" moniker that both Star Wars and City have garnered (hello, remember that for over 2 decades, it was just "Lego Town"???). Not to disparage on Star Wars, of course. Lego has indeed shot back to the top with first Star Wars in 1999 and then the launch of BIONICLE in 2001. I'd even go so far as to say that BIONICLE is what REALLY gave Lego new-found success, since with the Star Wars license, they had to share some of those profits with Lucasfilm, Ltd. BIONICLE was a gamble, but being completely developed in-house by Lego, all the profits made went to them.

On a personal level, it really shows, too. By 1998, I was just about ready to give up on Lego entirely. The Town sets were atrocious, Castle disappeared, all Space had were the Insectoids (which I only wanted 3 sets from anyway), Pirates were pretty much dead in the water, and though I still couldn't afford them, the Trains were nothing to write home about, either. And the sad thing was, this was going to perpetuate for another 3 years with even greater tragedies (no Space at all in 1999 and 2000!). I could tell my time with Lego was coming to an end, but then, like an angel come down from on high, the Lego Star Wars collection reached out its studded hand and pulled me from the waters of despair and childhood's end. Even when it seemed Star Wars was starting to let me down in 2001, the awesomeness of BIONICLE and the slow release of Lego Legends held on to me. And here I am today, having never endured the agony of a Dark Age. Keep it up Lego!

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By in United Kingdom,

@Bluemoose: When you gave the description of what Hasbro made you missed out Star Wars and Transformers, and I think they're the biggest of the lot :)

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By in Australia,

Following on from Bluemoose's last couple of comments, there is something to be said about how LEGO prices it's product in various markets around the world.

It would make sense for LEGO, if they are trying to keep their profit-to-production ratio efficient to price their product according to how the market in each area of the world operates. This would appear to be the reason why LEGO in North America, for example, is priced much lower than the same product in Australia/New Zealand (even after taking into account the additional costs such as transport). If the general market (ie. non-fan market) in one locale is generating high demand for LEGO's product at a higher price than in another locale, it makes smart business sense for LEGO to (unfortunately) price their product higher if people are willing to pay that price. This seems to be the case in Australia where it seems that the general consumer market is willing to pay more for LEGO when buying off the store shelves...

So, as Bluemoose mentioned earlier, the only way for the price of LEGO to go down in the Australian market is if everyone stops purchasing LEGO in Australia... :-P

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By in Australia,

Or we can arbitrage for our Australian friends. I mean, if the price difference is not explained by shipping, handling, taxes, and exchange rate why aren't we doing this already? Really, where are the arbitrageurs among us?

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By in Denmark,

@brickmatic: That's where eBay comes in, doesn't it?

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By in United States,

I would assume the size of the market has something to do with the pricing structure as well. Overhead can be more easily dispersed across each unit when you're talking about the volume of product being shipped to the biggest markets, such as the U.S. The funny thing is that I would thus expect prices in the EU to be as good as if not better than those in the U.S. So that one still perplexes me.

I found the acknowledgement interesting that Lego Universe was underperforming. They also mentioned that "virtually all" product lines sold more than expected. I assume Prince of Persia was one of the exceptions. Does anyone know if there's a way to track the progress of specific themes? I'm curious how Ninjago and Pharoah's Quest are resonating with fans.

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By in United Arab Emirates,

Alright boys n girls I'll stop buying in oz and start buying in us, ; p

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By in United Kingdom,

Could the increasing profitability partly stem from the use of ever-cheaper, thinner and lighter plastics? I took a ten-year gap from LEGO and came back late last year. I was shocked at the low quality of the plastics they now use (I gouged one piece with my own nail) and the extremely poor tolerances on manufacturing (stack ten pieces of the same brick and hold it to a light so you can see the ridges and shadows, or buld a wall and look at the gaps of varying sizes all over the place).

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By in United States,

Wow, everything is kinda what I figured it would be. I thought LEGO Universe would do better when it came out, but it's been obvious that it hasn't been doing good. :(

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By in United States,

I really like reading their Annual Report book (download at the bottom of the press release.) Lots of good trivia there.

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By in Canada,

LOL! Well Lego in Canada costs 25% more than Lego in the US. Right now our dollar is even worth more than theirs! Canada is right freakin on top of the USA! Where's the market sense in those higher prices!?

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By in Australia,

Being one of those Aussies who has to pay exorbitant prices mentioned, a few weeks ago I decided to email LEGO.com customer service regarding the price difference in Australia. No surprise, I received a stock-standard "variables and economics" reply. For anyone who's interested, here is their response:

~
Due to differences in economics around the world, product prices are established globally for each specific country or market area. There may be many variables including taxes, exchange rates and country laws which can affect the market value.

Suggested retail prices for our product assortment are determined well in advance. We rely on professional studies of the dollar fluctuations over a multi year horizon to determine the suggested retail price which will not change during the product assortment year. The suggested retail price of our products has historically not fluctuated every time the value of the dollar rises or falls to maintain an annual harmonized price. Our website and our catalogue reflect the set suggested retail prices.

Currency charges are based on the country where the order is shipping to. As soon as the system recognizes a postal code as opposed to a zip code, Canadian dollars are immediately applied, just as when the system recognizes a European address, it charges in Euros. Unless you provide us with a US address, you will be charged the appropriate currency, in this case, Australian dollars.
~

I was assured my "feedback has been forwarded to management"

LEGO is not hugely popular here in Australia, so jpmanalo's comments about the demand dictating the price here is off-base. With the exception of Star Wars, every single theme sits on the shelves for over a year before being reduced far below RRP.
I think this has more to do with the high prices here, the fact that it doesn't sell well to begin with, so prices have to be higher to make up for this. And oh how we do. Licensed themes are almost double the price of non-licensed.

If prices continue the way they do (Collectable Minifigs are now more than $5 AUD each) I'm afraid LEGO will lose a slice of profit from at least this Australian.

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By in Canada,

Star Wars is what brought me back into LEGO. So I'm glad its helping out the company and LEGO is going strong :)

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By in United States,

i am 14 years old and would have stopped playing with lego 4 or 5 years ago had it not been for... wait for it... Castle. yes, castle/knights kingdom. building castles is more fun than building spaceships; i think that the reitroduction of a major castle theme helpede lego out of its slump. but yes, yay bionicle and star wars.

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By in United States,

I think that LEGO is making a big gamble with Ninjago, considering it is a top battle/card game. A lot like LEGO Sports. This has potential to become more popular than LEGO Star Wars! Who knows? I heard that they may end LEGO Star Wars this year...

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By in United States,

I've read somewhere that the License for Star Wars ends by the end of 2011 or 2012, but both George Lucas and LEGO have started negotiations to keep the theme going on with LEGO for at least 10 more years. Let's face it, not only Star Wars helped TLC out of the slump, but also LEGO helped Star Wars to become popular amongst young kids. My twin boys are 5 and half years old now, and had their own LEGO Duplo sets, and saw me building Creator sets since they were pretty much born, but when they saw me playing the LEGO Star Wars Videogame on the PS3, they've got interested in Star Wars, because of LEGO. They already knew everything from Star Wars, just by playing the game over and over again. When I showed them the Original Trilogy on DVD a few months back, they became instant fans of Star Wars! Let's say LEGO - a building toy - primed them to the ultimate "Geekfest" that Star Wars is! I couldn't be happier, having kids that love Star Wars and LEGO at the same time. ;)

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By in United States,

Also, I bet LEGO Indiana Jones was going strong, but they pulled that out. I wonder why, and if they have plans to bring them back. I only had the chance to buy two sets, and now they're gone... same goes for Batman. Would love to have that franchise back. I hope they release new Batman sets when the new movie comes out next year. Indiana Jones 5 is also in production, so that may bring Indy back as well.

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By in Australia,

@birgoyle - at least you got a half decent response.... this is the response I got when I emailed them with exactly the same question....

"First and perhaps most significantly, please let me tell you about the important ingredient that goes into the making of our bricks. Each LEGO element is molded from a special, strong plastic material that must meet 28 specifications for quality and color. Once molded on our specially designed molding machines, several tests are then performed by people and machines to ensure that you will receive a set that can be built and played with over and over again.

We are very selective in our plastic materials to be sure that each red, blue or black brick looks exactly the same. There are only five companies worldwide who are able to supply this special plastic granulate that must meet 28 specifications for quality and color. There are also special molding machines that mold a brick within 5/1000 of a millimeter. In addition, people and machines check each box that goes out the door to make sure that every needed element is packaged inside.

Our Company chose to make a quality product--one that would give value both now and in the future. LEGO bricks and building elements last and hold a child's attention as they grow and mature, rather than breaking after a short period of time like many other products on the market. In fact, many parents write to tell us that their children now play with the LEGO bricks they had as children. Your satisfaction with LEGO toys is our primary concern. Whenever we can assist you with product information or service, please don't hesitate to contact our Consumer Service Department.

I would also like to bring to your attention thatyou are as a matter of fact able to order through our American website and pay in US$, however in order to do so you must have either friends of relatives living in the states who can submit the order for you."

Which let's face it, is a totally useless response that avoided my question altogether.
I do agree with you to some degree about Lego not being a popular here, but at the same time, some exclusive sets, such as the Grand Emporium, Imperial Flagship, and Emerald Night were extremely difficult to find and seem a lot more accessible in Europe and Nth America. Then again, supply here probably isn't as great which goes to show that TLG really doesn't care all that much about this part of the globe.

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By in Slovakia,

I buy lots of Lego - exclusive sets for myself and creator for my son.
It's a mystery to me why the Lego shop still doesn't ship to Slovakia.
They have a production plant across the border in the Czech republic.
Just reading in the press release that they built another warehouse in Kladno, CZ.
They ship to Poland and Hungary, why not Slovakia?
I would pay just to know the reason because it makes no sense to me whatsoever.

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By in United States,

LEGO Star Wars expires this year, but it will most likely formally be announce along with some $1000 mega exclusive set that will be released in September. Just a guess. I doubt Star Wars will really go away, but it hasn't been extended, even if the Eurobricks people tell you otherwise.

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By in United Kingdom,

^ Ever since the beginning, the Star Wars License has been on a rolling 4-year renewal. Every 4 years (2003, 2007, 2011, ...) the license is renewed; the exact terms of the license are up for renegotiation at each point, but that's entirely between Lucasfilm & LEGO. The license will continue.

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