LEGO Group's profits take a plunge

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After a years of double-digit growth, the LEGO Group has today announced that its profits for the first half of the year have fallen compared to the same period last year:

  • Revenue down 5 percent to DKK 14.9 billion compared with DKK 15.7 billion
  • Operating profit down 6 percent to DKK 4.4 billion compared with DKK 4.7 billion
  • Net profit down 3 percent at DKK 3.4 billion compared with DKK 3.5 billion

As a result LEGO Group Chairman, Jørgen Vig Knudstorp, has said that the company will need to "build a smaller and less complex organisation than we have today" which will result in the "need to reduce its total global workforce by around eight per cent. This would impact approximately 1,400 positions, the majority before the end of 2017."

This is of course very bad news, particularly for those directly affected.

I am sure we all have our theories as to why this has happened, which are likely to include The LEGO Batman Movie not performing as well as had been anticipated, a bloated product range, and pricing its products out of the market, particularly in Europe. What's your view?

The full press release is reproduced after the break.

The Group now prepares to reset the company to deliver on its long-term ambition to reach more children all over the world with LEGO experiences.

2017 First Half Financial Highlights (compared to first half 2016)

  • Revenue down 5 percent to DKK 14.9 billion compared with DKK 15.7 billion
  • Operating profit down 6 percent to DKK 4.4 billion compared with DKK 4.7 billion
  • Net profit down 3 percent at DKK 3.4 billion compared with DKK 3.5 billion
  • Cash flow from operating activities was DKK 4.6 billion compared with DKK 3.9 billion

The LEGO Group today reported fiscal results for the first half ending June 30, 2017. Revenue for the period totalled DKK 14.9 billion, a decline of 5 percent compared with the first half of 2016. Performance across the market regions was mixed. In established markets such as the United States and in parts of Europe revenue declined, while in a growing market, such as China, revenue grew by double digit.

Operating profit was DKK 4.4 billion, down 6 percent compared with the same period in 2016. This was due to lower revenue and increased costs associated with investments in production capacity and organisational capabilities made to support higher expectations of revenue which failed to materialise.

LEGO Group Chairman, Jørgen Vig Knudstorp said, “We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this.

“We are working closely with our partners and we are confident that we have the long-term potential of reaching more children in our well-established markets in Europe and the United States. We also see strong growth opportunities in growing markets such as China.”

During the first half of the year some of the best-performing themes were homegrown classics such as LEGO City, LEGO Friends, LEGO DUPLO and LEGO Technic, while the LEGO Batman movie products also saw a great response from consumers.

Plan for smaller and simpler organisation
During the past five years, the LEGO Group has built an increasingly complex organisation to support global double-digit growth.

Knudstorp said: “In the process, we have added complexity into the organisation which now in turn makes it harder for us to grow further. As a result, we have now pressed the reset-button for the entire Group. This means we will build a smaller and less complex organisation than we have today, which will simplify our business model in order to reach more children. It will also impact our costs. Finally, in some markets the reset entails addressing a clean-up of inventories across the entire value chain. The work is well under way.”

The new organisation will increase the LEGO Group’s focus on its markets and customers across the world.

As a consequence of the plans, the LEGO Group believes it would need to reduce its total global workforce by around eight per cent. This would impact approximately 1,400 positions, the majority before the end of 2017. Currently the LEGO Group employs approximately 18,200 people.

“We are very sorry to make changes which may interfere with the lives of many of our colleagues. Our colleagues put so much passion into their work every day and we are deeply grateful for that. Unfortunately, it is essential for us to make these tough decisions,” said Knudstorp.

The LEGO Group would provide the affected colleagues with redundancy packages which reflect their service to the organisation, including support in transitioning to new positions or new opportunities outside of the Group. Any changes would be implemented in accordance with local market regulation and in consultation with relevant employee representative bodies.

Returning to growth by leveraging the potential of LEGO System in Play
Pressing the reset button is one of two elements of a plan launched by the Group. The second element is how to return to growth. The Group is doing this by exploring adjustments to its successful formula for product development and marketing in order to achieve its ambition to reach more children around the world with LEGO play experiences that stimulate playful learning.

Knudstorp said: “We believe our most important contribution to society is through creative LEGO play experiences, as play is critical for children’s learning and development. LEGO play encourages children to problem-solve, collaborate, discover and imagine. The brick is the heart of our business and children of all ages love it. It offers endless possibilities and benefits for children, and we believe the LEGO System in Play has immense potential.

“We will find more opportunities to engage with kids and parents including innovative ways to blend physical building and digital experiences, such as our successful LEGO Life social platform and LEGO Boost building and coding set. We have a powerful and loved global brand, a strong business and are confident we can reach more children around the world.”

LEGO Group Half Year Result Financial Fact Sheet

201 comments on this article

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By in Norway,

If Lego was a little cheaper, then I might buy more!

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By in United Kingdom,

The fact they're letting go 1,400 workers... christ. Hopefully all those people are ok and manage to get more work soonish.

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By in United Kingdom,

Too many ranges, overpriced, etc Probably could count in Lepin undermining them in certain areas.

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By in United Kingdom,

UK is a huge market for Lego. The pound/euro rate since Brexit referendum has lost 20% while UK prices have not reflected that change (a new set like Destiny Bounty is priced £109.99, against 169.99€, basically 30% cheaper). It is a big loss in the trade margin. It probably explain a larger part on the loss than the Batman movie.

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By in United Kingdom,

With the post-Brexit 5% increase, prices have got much higher in the UK over the last year turning a lot of the smaller sets from impulse purchases to a more serious proposition. The Lego Batman sets mostly felt like they were over-priced by £5-10 and now we're getting some very expensive Last Jedi sets. Only the Ninjago movie sets feel like they're giving value for money.

I've also felt that in the last year Lego has put too much emphasis on poorly designed large-scale sets (such as the Hoth UCS and the Classic Batcave) which are hugely expensive and have limited appeal to anyone other than a small handful of AFOLS.

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By in Netherlands,

The price is most likely the main culprit. I hear of sooo many people buying tubs of second hand Lego for their kids, because of what new sets cost.

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By in Germany,

After two extremely good years, the net PROFIT (!) is down 3 percent, so they have to sack 8% of their employees?!

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By in United States,

This could be the beginning of the bubble bust

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By in United Kingdom,

"We are very sorry to make changes which may interfere with the lives of many of our colleagues" yes being made redundant may just "interfere" with someone's life!!

Profits down is an excuse to cut jobs. Cut the RRPs and sell more would be my idea. Plus maybe don't oversaturate the market with too many similar sets within a theme.

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By in United Kingdom,

I always wonder how much "Lego" get from sales. Obviously if you buy from Lego.com there is no 3rd party but if you buy from Amazon, TRU, Smyths, or even Sainsburys what percentage do Lego get ? I am more curious to know who gains when the 3rd parties have sales. This week I bought a set released in August 2017 for 40% off. As it happens it was £99.99 so I paid £60. How much of that is Lego and how much Amazon.... who does the discount effect more?

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By in United Kingdom,

The past few years I've bought pretty much all Lego Star Wars releases from either Lego stores or their website, but in he last 6-8 months I've bought a lot less direct and have started to wait a few months for big Amazon discounts, especially on larger sets.

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By in Australia,

The price of Lego has gotten ridiculous in the past year. As a result I've bought 75% less this year in the previous 4 and make no apologies for it. I still love Lego toys but with a family to support on a single income, it's no longer a sustainable hobby. The last Jedi sets are a good example of this. I was looking forward to the resistance bomber but at $180, I've had to pass. Ninjago City at $500 and The UCS Falcon at $1300 would represent irresponsible spending on my part and I can't imagine too many families that could afford this, no matter how appealing the sets are. In some ways the drop in profits may be the reality check the Lego need and a reminder that their prices are getting out of control.

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By in Ireland,

Price is too high. Too many product lines. Quality isn't what it once was. They've also seem to have gotten very fond on high value D2C sets, trying to establish the limits of what various lines will support. There will be blow back on that. I also, think there is too much corporate BS starting to sneak in. The recent channel 4 documentaries raised a number of red flags as to how it operates as a business. I also always get the fear when companies start building giant monuments (lego house) to themselves. I think they need to re-examine their own history again. The need to focus on the core product and deliver value once more.

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By in Portugal,

What I see (a lot) of people (myself included) talking about is how the release date RRP is just outrageous, and how frequent buyers would rather wait months, if not years, for the price to come down. One of the consequences is that Lego sees a lot less action running through their online shop, the only one that will remain chronically overpriced even after other sellers have marked-down the sets t what they are actually worth. Another is that people that may have been interest in quite a few sets grow less excited to get them over time and end up buying maybe a third of those sets, if that many. When they price the sets right, as with the Saturn V, the market responds (very) positively. But apparently for Lego the answer is in letting go the fine people that make the Lego machine run smoothly, rather than sort out their berserk pricing strategy!

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By in Netherlands,

Personally I think they still made enough profit but loss of profit means less off money for the shareholders . So they have to fire people to make sure those shareholders will get more money next time around

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By in Netherlands,

The term "plunge" is somewhat of an overstatement.

Reorganising is something every big company does from time to time. I think they are using the dip in profits as an excuse...

Brexit could be of influence also, only to show again that nobody is to gain from one of the most messed up referenda ever...

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By in Switzerland,

Well, not such a tragedy or? All companies need to adapt and lego started to generate a lot of non-sense besides lot of great products. And appealing to eco-fanatics with degradable bricks or feminists with Women of....... sets will bring very short applause on social networks, but will not help the sales - the pressure groups will not buy anything anyway as they do not care about lego. And by the way - there cannot be an infinite growth or?

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By in Ireland,

I'm confused. They have had an exceptional financial performance over the past 10 years with huge growth and huge profits and now because some half year results show a 3% fall in profits there needs to be a major restructuring and job losses???? The 2016 results released earlier this year had excellent results! You can't read anything into half year results anyway, the 2nd half of the year is much more important for Lego in any case.

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By in United Kingdom,

There are so many reviewers now and not all quality like established sites. I do think there are too many fan sites now that are not needed. Along with review sets that are sent out to reviewers who are not worth free sets in my opinion. I also think there are too many RLUGS allowed in close areas particularly in the UK which is not needed. If that saves people jobs by not allowing anymore, I am all for it

I agree with others the price is too high and it's putting parents off buying for their children, which is TLG target audience.

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By in Australia,

Hopefully this will see a restructuring and change of strategy to expand their target market beyond kids and listen a little more to what the AFOL market want. After all, the kids are buying LEGO, their parents are. Let's sink less money into Chima/NEXO or overproducing TLBM sets and more into making sure there is more than enough stock of Saturn V to meet demand.

Lot's of lessons to be learned, and I hope they start listening to their non-target market more, after all they are the ones who control the spend at the end of the day.

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By in Italy,

- Too many licenses, and prices way out of control to sustain licensing costs.
- Lower priced kits used to suck less in the past, and that was no more than three-four years ago.
- Quality. Lego, beware: chinese cloners have almost caught you in terms of quality, and are sloooowly beginning to create original lines.

Last Xmas I managed to buy a big City set and some Nexo knights thanks to a weak UKP and some hefty discounts (thanks Amazon) but if I had to buy them at full RRP, I'd have left them there.

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By in United Kingdom,

So let me get this straight LEGO have been making a ton of money and double digit profits for a few years. This year they didn't make as much profit as last year - so as a result they have to axe 8% of jobs? Why ? they're still massively profitable - and not in debt. So why are they looking to cut costs and sack people - they don't have to - they can afford not to. To me this decision smacks of greed.
I though TLG was better than this. Shame.

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By in Australia,

Tonight has been a night of disillusionment for me. I just found out that Lego stuffed up an order I have been waiting *ages* for, and I need it by the 17th which is a pain since mail doesn't come on weekends. Because of that, there also goes my Cavemen and VIP Keychain.
I never buy Lego at full RRP, ever. 40174 (that's the order they stuffed up) was the first and last set I'm buying direct from Lego. There's such a mistreatment of customers outside of the US recently - with some new sets, Australians have to pay double after conversion, and I don't want to even think about poor NZ.

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By in United Kingdom,

Like most posted before me, I see the price of some sets are set to high ie the Recommended Retail Price especially for some smaller sets such as in city. So if they could reduce these prices then I think they would get more sales. Yes sets can be more cheaper at 3rd party retailers such as Smyths, Tesco when they have reductions,as Lego has sold them to those retailers for x amount of money and ask them to sell them at Y price, so Lego has already made their money regardless of what the 3rd party sells them at during a promotion/sale.
Also Lego (IMO) needs to reduce its product/theme lines, too many. I have no proof but they appear to take a bit of a hit on some of the Movie themes, Angry Birds, Lego Batman, which are higher priced due to Licencing etc
Finally, there needs to be a more level playing field in pricing throughout Europe.

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By in New Zealand,

Good. Plunge babe.
Look after your workers and pick up yer quality!

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By in Netherlands,

The worst news is that is a report driven by shareholders. By no means those numbers are bad. 99% of the companies in the world would love to see those numbers.

The netprofit is still very high. It is way higher then 2014 and before. 2015 was just an extraordinary peak. 2016 and 2017 is about stabilizing at a higher frame then before 2015.

All in all good numbers so the message from LEGO is kinda weird that 1400 people need to be sacked. Yes, companies should not sit back when things are going well and as such it would've been a much better moment to see if people against their retirement age in the company would stop working before their official retirement. Add a good bonus and all is well.

I wouldn't even be worried about costs in general. Only product lines which are selling poorly or barely above break-even should be dropped to free up resources (logistics etc).

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By in Ireland,

@Horizon1978: Shareholders?!?

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By in Serbia,

TLG doesn't have shareholders, it's privately owned.

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By in Canada,

Sacking 8% of employees because they refuse to accept any slowdown in profit margin? I dunno, TLG, that's cutthroat, and not what I'd consider to be in line with the family values of your firm. Bloody capitalism.

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By in United Kingdom,

TLG is a private company with (as far as I know) no intention of floating or seeking outside capital, so doesn't have to answer to short-termist investors. As such, it could ride out the difficult times without firing people. A hiring freeze and natural attrition would thin the headcount; it would just take longer.

The next time TLG claims to be an ethical company that does no harm, remember the people it hurt directly and intentionally.

@Kheldar, It isn't the fault of capitalism. It's the culture of capitalism and short-termism in the West. In the Far East, for example, large companies - even listed ones - will suffer losses over quite long periods rather than fire people. Firing people is seen as a failing, not a strategy.

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By in United States,

My guess is Rogue One and Episode VII didn't come through. I think SW is a massive part of their sales and noticed it was omitted from the list of well-performing themes.

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By in United States,

Lego needs to cut back on making ridiculously large over priced sets that don't sell. Start making smaller affordable sets and interactive sets. It's 2017, they need to keep up with the times.

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By in United States,

Well I for one stopped buying sets. I sold off all my Star Wars sets and just kept the figures. Now I only buy the figures on Brick Link and the buildable figures at retail when on sale for 20-30% off. The Star Wars line got too big too fast and was super expensive. I also collect Funko and Hasbro Star Wars so something had to give.

Also it seems like in recent years LEGO has relied too heavily on licensing. Remember the days when LEGO "System" sets had all kinds of original themes and ideas? Now they take those designs and slap a Star Wars logo on them (I'm looking at your Freemaker Adventures).

There should be no reason why they can't come up with a new line of original sets at least once per year. Doesn't have to be anything big - maybe just a small 6 set run.

And to cut your workforce by 8% - come one.... You have no shareholders or Wall Street to answer to - your still making more money than any other Toy company in the world. That folks - is what we call greed in America.

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By in Netherlands,

Aye, LEGO is privatly owned but this report & text comes across as a shareholders thing.
Makes it even more weird. ;)

... external shareholders in 2018?

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By in United Kingdom,

Too many sets at too high a price. I love the Star Wars theme but far too many sets are released in each wave. Quality not quantity.

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By in United States,

Welp.

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By in Canada,

I'm no business expert but really can a company truly expect profit margins and revenues to continually increase and never decrease? I know that what they'd like but they do have to be realistic.

I'm sure others have mentioned, but perhaps due to the poor outing of both last years Star Wars UCS had an impact.

I'm also one of those who typically waits till items are on sale (20% at least) before I buy most of my items. Right now Canada has some of the cheapest prices but even then I think some sets aren't worth there MSRP.

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By in United States,

I tend to agree with most comments, however I will point out that from a business organizational heath perspective it makes sense to trim the fat once in a while. Down quarters are usually a good excuse to do so.

The people they let go are usually the underperformers, either because of their own performance or being in a job that shouldn't really be there.

I went through this at a company once and they were hiring again in earnest within 30 days of the downsizing. From my perspective (one who was not let go) things were better after it all shook out.

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By in United Kingdom,

I'd never equate my own actions to be indicative of a whole populations, but I too have gone from a 'Day One - buy whole Star Wars wave' consumer to someone who'd rather wait for good deals, or in some cases, not buy sets at all. For example, the last couple of Star Wars waves have been so lackluster that I can't bring myself to get pay full price for any of them. The insult of having to pay 'Benelux tax' here in the Netherlands on most sets compared to the prices in the countries surrounding me (Germany) adds further insult to the injury of already overpriced sets. That's easily bring me to wait for better deals on Amazon or to pass on sets.
Another very recent example: we don't even have a Lego Store here, so I've had to resort to buying the Scarif Trooper on eBay. That's money I might have spent on S@H.
Sure, I'm looking forward to the UCS Millennium Falcon, but even with that one, a day one purchase is not a certainty at all due to price.

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By in United Kingdom,

Hmmm. Everything's cyclical...Firstly, Lego is way overpriced. Sets are quite bland. Lacking creativity...especially snot technic...finally, it's time Lego went back to its roots: less licensed tat and the reintroduction of core lines at affordable prices:

Town,
Space,
Castle,
Fabuland and
Studded technic sets...

There is a market for smaller impulse buy sets at cheaper prices...especially in a new Town theme...

Lego needs to excise it's silly pink girl themes. Lego as was was a unisex toy, it doesn't need "Friends" etc.

It's hypocritical of Lego to claim they're "anti war" when they make Star Wars Death Troopers and Super Heroes with name's like "Deathstroke"...high time they did a military line like Brothers Brick, Oxford or Cobi but that said that takes from their equally great market share...they also need to reintroduce their spares service and a more easier route to customer service...I can write to Cobi in Poland via email, get a prompt response and get missing or broken parts replaced with ease....You don't get that with Lego unless you really complain...

It's time Lego went back to its roots.

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By in United States,

I pass on some of the SW sets now because I already have the minis and the set doesn't really appeal to me. I don't care for any of the Lego batman movie sets, angry birds no way. I always watch for sales from Walmart etc. and only buy from Lego.com when a good freebie is available. I probably likely will pass on the new UCS millennium falcon so expensive and no new figures just new and copies of ones I already have.

I feel sorry for the people getting laid off but at the same time Lego is using it as a reason to clean house so as long as they do get rid of people that aren't pulling their weight, but if they get rid of someone for the wrong reason it may come back and haunt them since they do have competitors that might snatch them up.

over all they need to make sets that have appeal and affordable.

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By in Denmark,

I won't/can't comment on the rest, (beyond hoping I still have a job by the end of the year) but for the guy who mentioned 'LEGO House', this is not a LEGO Group project, it is paid for by Kirkbi (the Kirk Kristiansen family). It was hugely expensive to build and is never expected to make a profit and is essentially a gift to everyone who ever loved the LEGO product from Kjeld and the family. It should not be included in this discussion.

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By in United States,

The constant re-release of the same sets under the Star Wars Line has weakened it. Figures are too easily purchased on the secondary market for the updated sets to be that desirable. The cost has risen and the quality and creativity has dipped.

Super Hero Themes have become more about the figures and less about the overall structures being given as play sets. Sure there are some nice builds but it's only about half of the sets and the others aren't even structures that kids can do much with.

Other Lego owned themes such as Nexo Nights and Chima are/were very weak. Stick with Cops/Robbers, Castle/Nights/Dragons, Trains/Planes, Cars, etc. and you can't go wrong. They keep talking about play value and then they come out with these weird designs that kids can't relate to. Old school is new school. You don't need to be innovate to be successful with toys. You just need more of what has always worked.

Their promotions are excellent and I appreciate them very much plus their VIP program works well but their stores and online prices do not compare to other retailers such as Walmart and Target who drop their prices regularly to move inventory. Lego does not do that often enough. I work across the street from the Flatiron Store in NYC and only a week ago did they go to Online Pricing where prior it was a 10% differential. I would not buy the larger sets there to save money. I will now again but that's just one example of how their model fails. Plus, you can't have your re-sellers have the products before you do. Happens all the time!

They still have an amazing brand but they do need to listen to their fans and buyers more often. Too many times they think they are right and we are wrong. I think this is a mild wake up call.

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By in Sweden,

Ninjago City Modular Series.
Fixed.

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By in United Kingdom,

I guess the new LEGO CEO has 1400 less fans right about now.

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By in United Kingdom,

It's times like this that in my view these mega coperations give capitalism a really bad name.

Lego - we've had a "plunge" in half year revenue and profits, so we are going to have to lay off 1400 positions or hard-working families (probably) struggling to make ends meat.

Consumer - that's terrible, your sales must have dried up, no longer profitable etc.

Lego, oh no, we were still profitable, to the tune of 3.4 billion DKK.

What?!!! It's pure greed and there is no justification for any lay off's when the bottom line says they are making that amount of profit.

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By in Ireland,

I agree with basically everything that people have said here. LEGO has simply been making too many sets and pricing them way too exorbitantly. I've talked to a lot of friends who have a casual interest in LEGO and who would be interested in starting a collection, but who won't buy any due to "how expensive LEGO is."

I've felt that LEGO has gotten too pricey recently also. I'm very willing to spend my savings on my hobby, but for example, a matter of years ago Star Wars was my favourite theme - I would pick up multiple sets from each wave, because the designs appealed to me, the waves were smaller (quality not quantity) and the prices were more modest. I still treasure 6211, the Imperial Star Destroyer from 2007, which cost €100 back then; the new Star Destroyer, ten years later, is €50 more expensive. It adds up, and now Star Wars has become both A) far too expensive to sustainably collect and B) too expansive, with too many sets and not sharp enough quality, IMO.

Over the last while, LEGO has been indulging its recent status as a commodity and almost a luxury. There has seemingly been a landslide of large, expensively priced D2C sets; there is one for seemingly every theme at this point, and it's possible that LEGO is over-catering to the small portion of the market who are wealthy enough to comfortably afford these sets. There are simply too many D2C sets to choose from, and most buyers will be only able to afford one at most. That will inevitably leave many very expensive sets with niche markets warming the shelves - perhaps such as the 1966 Batcave. D2C sets are very nice for those who can buy them; but I would perhaps advise LEGO to produce fewer huge sets in the future. Quality over quantity, and affordability over severe exclusivity.

On a more specific, micro level, I would also attribute LEGO's losses to some little experiments they've been making like Brickheads. These seemed like a blatant attempt to capitalise on Pop! Funkos, and I think it will be looked at in retrospect as an ill-advised idea. I don't think they've been selling especially well; I have never seen a kid remotely interested in them, and many are on sale or will soon retire; I wouldn't be surprised to learn that LEGO expected these to blow up like Pop! Funkos, but that they are actually flopping. With so many LEGO sets on the market already, it was probably a bad idea to strike out with an experimental idea that seemed an obvious cash grab, and one with hefty licensing costs to boot.

I hope that the lesson LEGO takes from here is to make their range smaller in the future and work to maintain consistent quality across the board, and bring their prices down. Perhaps lean into original offerings a bit more than experimental licensed properties (AHEM Angry Birds). Fewer, but strong quality (unlike the Hoth set) D2C sets would also help, I think.

Just my thoughts, thanks to anybody who read my ramblings!

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By in United Kingdom,

Sf1378
"Lego needs to excise it's silly pink girl themes. Lego as was a unisex toy, it doesn't need "Friends" etc"

If it was not for Friends and the Elves themes we would not be buying Lego in my Household as it is the only Lego that my 6 year daughter is interested in.

My husband and I grew up in the 70's and both loved Lego and wanted to pass this on to our daughter. We have bought other themes and sets for but she just is not interested in them. The Friends and Elves Lego is her main and almost her only toy as she is not really interested in anything else. So there is a place for "silly pink girl themes".

On the odd occasions that I have needed any broken parts replace I have not had any problems with Lego's customer service.

However I do agree that Lego need to look at the pricing.

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By in United States,

I can barely afford LEGO sets as it is I can't imagine if they got more expensive. also, I don't think down 3% in one-quarter justifies a group re-do and leaving 1,400 people unemployed

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By in Canada,

As a consumer, I'd echo a lot of the comments made above me. Too expensive and too many themes. Felt like they've been "shotgunning" a ton of themes in a load of various ways. A bit of identity loss too. Lots of licensed themes consumers aren't caring about.

Also, new management just came in recently. What's the best way a CEO can look good from a profit standpoint? Axe employees. It's a tale as old as time. However, like others have said, I wish Lego didn't conform to that method and took a unique approach that showed they cared more, and panicked less. I think they could get back to basics without letting 1,400 people go and affecting their lives. Just because that's the kind of company they are (or were).

I've been missing my classic castle for awhile now. Still think they could have handled LOTR theme better and turned that into an evergreen theme that reached children and adults. They'll figure it out, but I believe this is a healthy wake up call.

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By in Australia,

"and pricing its products out of the market, particularly in Europe. "

Lets not forget Australiasia!

Oh, and LEPIN.

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By in Netherlands,

Building "The Lego House" took a big bite from the profits as well.

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By in Serbia,

The Lego House was not financed by TLG.

It's also now pretty clear why they instated a new CEO recently.

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By in Netherlands,

^That is nonsense, as stated before the Lego House is paid for by Kirkbi not the Lego Group

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By in United States,

@sf1378

Did you even read the article?

"During the first half of the year some of the best-performing themes were...LEGO City, LEGO Friends, LEGO DUPLO and LEGO Technic..."

Please, explain your assertation that TLG "doesn't need Friends". How would ending production on one of its best-performing themes--one that has been one if its best-performing themes each year of its five-year existence--help improve their profits?

I second what lippidp said and found it very striking that Star Wars was not included in the paragraph where the article mentioned best-performing themes. Saying that the Batman Movie products "saw a great response" sounds like PR trying to put a positive spin where there is barely something positive to talk about. That makes the omission of Star Wars even more eye raising to me.

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By in United Kingdom,

Definitely agree with the comments about pricing policy. The new Star Wars movies haven't generated a massive amount of interest, but LEGO have just got greedy and tried to shift larger and more expensive boxes than ever off the back of them and it's turning people off everywhere you go.
The same is true of the LEGO Batman Movie - the size and prices of Batman's vehicles are preposterous, and the bad guy sets only exist to shift character figures; their value as playthings is negligible.

But they've got plenty of history of this; it's what destroyed the LEGO Legends line; the Christmas specials periodically flirt with ramping up the price beyond what people are willing to pay; LEGO Ideas is going that way; Super Hero Girls has been torpedoed by three big, ugly and very, very dark sets and UCS has just trumped the lot for insane pricing.

At the same time LEGO have let their founding principles of quality slide until they're no better than their cheaper competitors. Just look at the Ghostbusters HQ - on LEGO's own website you can see the bands of inconsistent dark red between the 1x6 and 1x4 bricks, and no-one at LEGO cares in the slightest that they're actively promoting their own cr*p.

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By in United States,

Lego has become arrogant. They have come to expect that anything they create will sell. Hopefully they realize that not anything Lego will sell, just because it has their logo on it. I feel like Lego has gotten really lazy with new set designs and releasing new themes/subthemes that aren't that good.

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By in United States,

They should ditch some pointless themes. Like Mighty Micros and also stop making random and pointless Ideas sets.

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By in Switzerland,

Like with most companies of this size, the problem is: corporate greed.
It's not like they made a loss, their profits just were not as high as they wanted them to be.
Letting 1400 people go for the first sign of a decline in profit: not cool.

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By in United States,

^darthmar Lego is privately owned, it has no public shareholders. The only people impacted by the profits are the founding family and the employees.

Sad to see so many job layoffs, but hopefully the Lego bubble bursting a bit will return the market to a far more consumer friendly state. 2015/2016 were ridiculous with how quick so many Lego sets showed up and promptly vanished due to being sold out so fast. I have noticed 2017 is beginning to be more like it was five years ago, with many sets sitting on the shelves.

Also the first half of the year clearly rested on the shoulders of the Lego Batman Movie. While that line has many great sets it seems Lego pooled their best designers onto the Batman sets. As such the other themes suffered. Marvel, Star Wars (to an extent), Nexo Knights, etc. all had a lot of lackluster poorly designed sets at the first half of this year. I feel Lego bet it all on Batman, ignoring other themes in the process.

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By in United States,

Too many people saving up for the Falcon in the first half of 2017?

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By in United Kingdom,

@Dude45 - You'll be telling us next that "Only the best is good enough"!

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By in China,

My advice:
1. make sets less complicated, less detailed to increase playability and encourage imagination from kids just like in the 90s. Lego sets are meant for creativity and play. Not dull modularity and display.

2. STOP BOTHERING with what AFOLS say. The majority of Lego consumers are kids and their parents who don't even have the slightest idea what AFOL stands for.

3. Respect the Aftermarket. Lego tends to delay retirement of popular sets by a large margin these years and re-releasing high-value discontinued sets. I understand they are trying to earn these money from those Aftermarket resellers. It might appear profitable in the beginning but with more and more vendors losing interest in "investing" in Retiring sets, the damage in sales is going to be profound.

Plus these high-end re-releases are often less innovative and appeal mostly to AFOLS. TLG is going to completely miss their main target market with them.

Let's wait and see how it goes in the long run.

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By in United States,

Wow first time in a while they are losing profit. Basically here why in my option
- Too many themes
- Price a little high maybe lower between 10-20%
- Inflation prices for other countries in the world I now see Europe having too many different prices
- Licensed themes cost too much (mostly Disney lol, like the new big castle for $350, bricks alone cost only about $277 so sell for about $300 if you want)
- Selling too many to other vendors like Amazon/Other Retails which normal give customers between 20-50+% off went they want to get rid of stock
- Many people have a set amount of money or range to spend each year so they are now cautious in what they are buying 1 set or many sets
- Plus Too many people saving up for the Falcon at $800 WHAT

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By in China,

@ericjohn

Seconded! The Friends theme is in perfect line with the demand of its target market thus performing better and better since its beginning.

I particularly like the assorted "girly accessories" that came within larger sets to make it more like a doll house than a bricky model.

Playability is always the key to Lego products where the Friends theme provides so much.

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By in United Kingdom,

I'm disgusted to see them treating their employees that way. 3% less profit? If they were anywhere near as innovative, family friendly and ethical as they claim to be, they'd absorb that and learn the lessons (that growth is not infinite, that the market will not bear endless price increases) of it and move on.

As for the presumptions some have made that they must be getting rid of the "underperformers", it's easy to say that when it's not your job on the line.

Delighted as I have been to see so many huge, detailed sets this year, it's been hard to imagine who can afford all of them, or even half of them. I'd have loved to have bought Assembly Square, the Silent Mary, Ninjago City, Saturn V and the Old Fishing Store, to say nothing of a lot of the "ordinary" large and small sets, but in practice I had to choose, and my purchases for most of the year were dominated by last year's sets at discount. I rarely have enough money lying around to buy massive sets on release, so I saved and ordered the Saturn V when the second production run happened.

I used to think these buying habits made me a minority on Brickset, but more and more I seem to be seeing people say things like, "I'll maybe get the Old Fishing Store/Ninjago City in 2018 if I can afford it", and even on a forum full of Star Wars fans, some of whom never got a UCS Falcon the first time round, there seems to be a substantial number of people who just can't consider buying the new one at that price.

And we're hobbyists who put aside a chunk of our money to indulge in that hobby - for parents buying for kids, it must often be a case of "they'll get the City sets on discount for Christmas, but there's no way I'm buying them all those overpriced Batman movie or Star Wars sets"... at a certain point, you just can't squeeze any more money out of people, no matter how appealing the sets might be (and I'm not convinced the designs have reduced in quality or playability).

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By in United States,

This smells, this smells of BS.

If you had years of double digit growth and now only HALF the year sucks you lay off 8% of the workforce, then you are planning for even greater loses in the first. If this was a one off thing you wouldn't need to fire everyone.

Also we can all debate why this is, UK prices are higher because your money is worth so much less. There are too many products and they cost too much. Target, Walmart and Amazon USA have every set for 20% off at least once a month, if not all the time. But we don't know what really is the issue.

However can we at least some basic facts right, LEGO is family owned, there are no stockholders to please. So that's not why they are firing people.

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By in United States,

I interpret the layoffs as an indicator of a couple of issues. If they planned on continued 10% GROWTH, any, decrease in sales is alarming and requires a pullback in costs to maintain margins.

Since payroll costs are an ongoing commitment, this tells me their 2nd half forecast is poor (relative to plan) and the outlook going forward has been reduced. Cutting headcount is a tough choice to ensure appropriate profit margins in a period of flattening to declining sales. Certainly a major mindshift to go from back-to-back double-digit growth to flat or down sales. Hard to overstate how major a change that can be. We're talking about Revenue that is likely 15%+ short of plan. A huge miss.

Finally, the outlook on "a clean-up of inventories across the entire value chain" is not a minor task either. Sounds like their internal supply chain (whether from forecasting, production or efficiency) is gummed up and that is, again, not a small consideration.

As others have said, clear reasons for a change at the CEO position.

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By in United Kingdom,

Personally I feel Lego's problems are:

1. Costs are too high per set. If they're going to site Lego Batman for instance, its because a lot of the smaller sets were £5 - £10 too much, as were the larger sets. As for the Last Jedi ones... the same goes there. Put your prices down, and they'll sell more. Heck, if other stores can immediately discount most of these sets in stores bellow what Lego officially sells them at, and still be turning a profit, it just shows you Lego is pricing them way too high.

2. Poor design choices. Lego has to remember that the two of the main factors people consider in buying lego is a) how good it looks and b) the play value. Lack of play features and poor design put people off buying sets. Take note of the CMF series for instance... Lego Batman has sold everywhere massively due to the huge variety of characters and unique designs, while Ninjago is no-where near as popular due to many of the figures being plain, boring, or exactly the same as in the boxed sets.
Again, I'll site the Last Jedi sets here for many of them being rather ugly and dull. The heavy Scout Walker for instance.

3. Not enough diversity. While some people blame too many themes, I fell that lego hasn't diversified enough. Look at Lego ideas... many people submit sets that get massively supported, but are then rejected for going against legos rules of being to violent, or depicting things of an adult nature. Its clear though there would be a huge market for such sets, so by not doing them Lego is shooting itself in the foot by not picking up on them.

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By in United States,

"During the first half of the year some of the best-performing themes were homegrown classics such as LEGO® City, LEGO Friends, LEGO DUPLO and LEGO Technic, while the LEGO Batman movie products also saw a great response from consumers."

This is way, way telling. Basically licensed themes are not mentioned. Ninjago is not even mentioned, but highly telling that Star Wars is not mentioned. Kudos to Friends.

Why have I bought less? It is not about too many themes, but it is all about too many licensed themes. My son, who should be in their key target audience has had so few sets he likes due to everything licensed. He loved Alien Conquest and Power Miners, and all the fun quirky themes. Those are all gone. Because of that, there are few sets of interest for him.

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By in Belgium,

Oh no! Less profit, maybe the owners can only buy 1 rolls royce this year!!??!!
Lets fire some people so we can buy 2 at least.
Damn capitalists.

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By in United Kingdom,

Without any detailed knowledge of LEGO's internal structure or the relative success of certain products it is impossible to give a fully informed opinion on this development. Nevertheless, I will weigh in based on my own experiences with a couple of alterations which I might make were I in a position to take these kinds of decisions:

1 - Reduce the number of themes. Many others have made this suggestion and I absolutely agree that LEGO's current portfolio is far too broad to be sustainable. I appreciate their efforts to diversify and try new things but reacting more quickly when certain themes are unsuccessful may be beneficial. Speed Champions, DC Super Hero Girls and NEXO Knights struggle at my local LEGO store so I would be tempted to eliminate those. I think we can also assume that Dimensions will not be continuing and that certainly seems like a wise decision.

2 - Streamline communication channels. Dealing with LEGO directly is often challenging as there are many different points of contact and one department rarely seems to know what another is doing. I have only experienced a little of this where product announcements and releases are concerned but I would not be surprised to find that a similar trend is reflected throughout the company which may cause problems.

3 - Reduce investment in new themes. Innovation seems to have been the subject of much attention within LEGO over the last few years and I can appreciate the reasoning behind that. However, I think there is sometimes too much investment in unproven ideas as new elements and extensive advertising campaigns are produced, not all of which seem necessary. To take a single example, the first wave of NEXO Knights yielded a total of 31 new pieces and many more have appeared in subsequent seasons, not to mention a plethora of recoloured pieces and extensive digital development. I would argue that not all of that was necessary. NINJAGO succeeds based on a high standard of set design and popular characters, not the volume of new parts or digital interactivity.

I would also point out that the press release reads 'some of the best selling-performing themes were homegrown classics...' which would preclude Star Wars. I am confident that Star Wars would appear among the most successful of LEGO's current themes but LEGO has chosen to focus upon their own original themes in this instance, as one might expect.

Finally, it must be emphasised that this is a fairly minor drop in the grand scheme of things. There should certainly be a response in order to ensure that there is no further significant reduction in profits but to react as though this is the harbinger of doom for a company as successful and profitable as LEGO would be foolish in my opinion.

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By in United States,

@sf1378: I'm glad LEGO isn't silly enough to listen to your advice. Friends is way more successful than Fabuland ever was. The idea that "non-girly" LEGO is unisex is a lie men tell themselves so they can pretend the stuff they like is good for everyone and the stuff they don't like is bad. LEGO has always TRIED to be a toy that girls like as much as boys do, but they never even came close to achieving that balance prior to LEGO Friends.

Anyway, news stories like this always invite all kinds of idiotic comments about how "if LEGO made what I like and stopped making what I don't like, they'd be doing so much better!" But the reality is that most of us AFOLs are way out of touch when it comes to what kids actually respond to. Even younger AFOLs like me can't pretend our tastes are a perfect strategy for success. I was a Bionicle kid, and still love that theme! I'm sad it ended last year, and I could dig up all kinds of authoritative quotes about how instrumental it was to saving LEGO from bankruptcy in 2003. But that was then, this is now. Kids today are excited for different themes than what I grew up loving, and frankly these newer themes tend to be a lot BETTER than the stuff I grew up with in terms of design refinement and creative potential.

I feel bad for the LEGO employees who will be losing their jobs, and I hope they will not have trouble finding new employment. That said, this is nowhere near as bad as things were in the crisis years in the early 2000s, and I think LEGO has a good chance of getting back on track, at which point they can ramp up their recruitment again.

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By in Switzerland,

As an adult customer going back to LEGO with my young, the catalog looks grim.
If you put aside the unbelievable amount of licensed products, there's nothing much left in here.

Call me an old man, but hell, 47 categories in the Amazon Shopper and my kid have interest in only 4 of them (City, Creator, Speed Champions & Technics). All other have absolutely 0 appeal to him, or even I.
Where are the sets solicitation the kid's brain and imagination ? Systems collections like Aquazone or Castle drained numbers of my youth hours. How much play value can you give to a Marvel/Star wars/Brickheads series as a kid under 12 ?

And the prices are just ridiculous. You get a RRP on LEGO store close to 20% higher than prices offered by major Internet players. Local store are just beyond stupidity and looking to cash-grab grandparents or parents with little knowledge of the pricing (Seen a 22€ price tag for a single speed champion car yesterday in a well-know French store).

You just have to wait twice a year for seasonal discounts and get away better than any VIP weekend or what-ever-the-day-is-event.
Now I only order from amazon with totally acceptable prices with regular discounts, or second hand on sale yards.

Few years more down this way, and LEGO will be nothing more than interior design products. Just have to see the latest release and the moisturizing around it "look at my 800€ coffe table, oh and my rocket on display next to this awesomely detailed fishing hut with no fun value."

Let's hope that in the 1400 people that will get roasted for no reason, at least half of them will be in marketing.

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By in United States,

tlg: disassociate from steve mnuchin, please!

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By in United States,

Currently their product range is too wide. You have themes such as Speed Champions, or the most recent Agents sets which never even had a presence at US big box stores such as Target and Walmart. This effectively made these ToysRUs exclusives.

The life cycle of product is too short. Very often, the toy is not out on the shelf for more than a year before it is gone. Adult collectors very often have difficulty collecting all that they want in a given year. Throw in additional family members, and chances are too good we won't be able to buy all of any product line because there isn't enough money to go around, before the sets disappear from shelves and we are sold a new product line.

They spend design time/money on all of these sets, and they do not even get all of the money I would like to spend, before they pull the product from the shelf and move on to something else.

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By in United States,

I have noticed every time I go to Walmart or Target their stock never seems to change too much and there always seems to be a lot of the big expensive stuff and the $30-$10 range stuff is sold out. I admit I don't buy a big sets that often, but I get at least 1 or 2 $60+ a year, but I'm an AFOL so I can afford it. I agree there are too many huge sets that not many will buy, but there are so many medium sized ones that run you $70. I mean look at these new Star Wars sets from force Friday...most of those are over priced. Now I scavenge Walmart clearance in the hope to get something good.

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By in United Kingdom,

For me it's about the fact that the new sets from this year are dull 76085 is a case in point 4 minifigures and some columns for £20, no thanks. I collect Star Wars, super heroes, city and modular buildings but I don't think i have bought a Star Wars set this year except 75172 y-wing, and seeing the last Jedi sets i don't see that changing. The sets for the Guardians/Thor/Spiderman/justice league films are underwhelming so I will pass and the last modular I bought was 10232 Palace cinema which I bought for £90 (inc s+h), a saving of £40 on the Lego.com price. The lower priced sets (£25 or less) have no building to them, 10-15 minutes so are bad value and adults and children are noticing this.

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By in Canada,

Ok, a couple posters have blamed 'capitalism'.

I just have to retort that if it wasn't for capitalism, LEGO would have never existed.

There is a reason it didn't begin during the Cultural Revolution. Most working people today, even if down on their luck, live like kings compared to their ancestors regardless of backgrounds. Just having a flushing toilet, food in your belly and a roof over your head is a dream fulfilled.

I hate to break it to you, but regardless of whatever system we use IN REAL LIFE, there will ALWAYS be elites up high and the poor down below - feudalism, communism, socialism, capitalism and so on.

I support LEGO's freedom to make THEIR choices for THEIR company. We have the freedom to support those choices with our wallets, or not!

I do however want to express my sympathies to those LEGO employees that will be laid off and their families - that's never fun and I wish them the best of luck.

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By in Canada,

Sorry Brickset, but the headline smells of journalistic sensationalism. 3% down is not a plunge.

I think it's good TLG got a wake-up call, they seemed to be in this delerious post-The LEGO Movie high that everything is awesome. For a period, they couldn't put enough product out there. But surely they could not have expected that to last forever. I would have thought they would have a pretty good grasp of what their target market is and a lot of that target market could have outgrown those sets by now and are moving to other toys.

However, reacting with an immediate workforce reduction seems short-sighted. Cutting cost by taking people out is just such a cop out by large companies. Not only will it put more pressure on those staying behind, it means you have less people that can innovate and bring you back on track! Surely they could ride this out and solve it with natural attrition. TLG is going to find it harder and harder to keep up their public appearance of being this ethical and caring company.

I can sum up my personal views as follows: Too many sets coming out too quickly at too high a price point with a shelf life that is too short.

For example, I missed out on the Scooby Doo line because I was not able to buy them when they came out, then they were gone when I would have been able to buy them.

Another issue I see is the real hit and miss on the quality of the sets. We have gotten some absolutely awesome sets and some absolutely terrible ones.

Considering their target market is transient and has a span of perhaps 5-10 years, I think they should actually do more in terms of re-using the designs of previously released sets that worked well. Improve on what works well rather than trying to invent something completely new. That would surely save them some money.

What they did with the Winter Toy shop made good business sense. I appreciate them improving on the Snow Speeder and MF. They should also do this with the modulars. I'm not saying rehash the entire product catalog every 10 years, but pick out those products that did do very well, improve upon them and release them again. There will be new buyers out there that missed out on the original releases. Instead of having that group send their money to re-sellers, it could come back to TLG.

Hopefully those affected by this will be looked after and land on their feet.

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By in Puerto Rico,

Hope the affected are able to get better.

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By in Singapore,

Echoing the thoughts of some others... as I live in Singapore and travel across Asia and Europe for work and back to my family in Boston, I can attest to LEGO pricing themselves out of the market in many regions of the globe. With 20-25% mark-up on products that are already at a premium, it's almost impossible for all but, the well-to-do, to buy all the sets in one Theme, never mind, collect or play more than one Theme. As an AFOL, I find it difficult to collect every Star Wars set, I could not imagine if I had 1 or more children seeking them as toys, in addition to their real-world expenses. They should rethink their lic and pricing. I believe that a modest reduction in price would net a larger increase in sales.

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By in Australia,

It seems pointless to argue on the LEGO Group's profits especially in a 76 strong comment chain, however, to give my two cents to the issue l started collecting LEGO Star Wars back in 2007-8. At that time LEGO Star Wars in Australia was expensive but it wasn't nearly as expensive as it is today. I know there are a lot of external and internal factors to consider and l bet if you did a SWOT analysis on the LEGO group you would find dodgy supply chains, poor communication / customer service and all sorts of things but it always comes back to price, asking "what is a consumer willing to pay for a product and or service". LEGO Star Wars today, with the help of Disney, is impossible to buy into, A $40 LEGO set back then now costs upwards of $60 to even $80 (AUD). I hate to think what New Zealand has to pay because they pay even more but when you compare it to the US it's a scam. I always see a ton of comments arguing about the prices in the US and all l'm thinking is YOU GET THE BEST PRICES. The UCS Millennium Falcon is $800 USD that is $1000 AUD... so WHY is the price in Australia $300 extra. I could probably fly to the US and pick it up there and probably spend the same amount of money.

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By in Czech Republic,

I wonder whether the all-green energy-sustainable effort of LEGO to be running 100 % on a clean energy didnt cut a much deeper hole in their accounting books than they are telling us.. still. I HAVENT HEARD of any company this size that would run the factories only on green energy. NONE. its got to be costly..

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By in United Kingdom,

so not surprised they have been putting their name against everything, Lego Dimensions has so many licences. its a repeat of the 1990's and the almost case of no more Lego.
they need to close Lego Ideas, get shut of most of the licences for themes. stop doing the collectable minifigures. I know that most of these are not going to be favourites but MOCs are not for full scale production they are for personal enjoyment. they've been too expensive and must have major overhead costs.

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By in United Kingdom,

Hardly surprising. Too many sets out for a short period of time, and priced far too high.

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By in Germany,

First of all, bad stuff happens and this does not mean things are drastic.

Second, I was recently watching one of Jang's reviews of the MegaBloks Halo line, and it made me wonder... How come much smaller MegaBloks can afford cheaper prices with same set quality, larger part variety, even for licensed sets, and they do not announce job cuts, etc?
What are they doing differently? Cheaper plastic? Less marketing spend?
I am genuinely interested in hearing this. I understand how Lepin works, but MegaBloks have original IP/etc, they are not China-based, they should have similar cost structure.

Third, what I would love to see from Lego is taking Lego Ideas the next logical step further -
towards Kickstarter. Lego knows for sure how much it costs to launch a D2C set. So, for each submission that breaks a certain "good enough for us to pay attention" threshold, Lego would say "We can produce it for $XX if YYY people pledge, or for $2*XX if YYY/2 people pledge etc. Start pledging". Job done. They they can fire another 1400 market research people, as clearly those don't work well, but this thing will clearly show what sells and what doesn't :) If completely fabless people can launch products on KickStarter - why wouldn't it work for Lego with their own manufacturing and supply chain already worked out?

Instead Lego builds less and less construction sets and more and more Toys (Star Wars and other licenses aside). Why do they think they can compete with "proper" toy makers?
Look at the Technic line. I stopped buying Technic, since what you get is a $150+ glorified toy with 3-4 fairly primitive functions. One can have the same one 3-4 times cheaper with better looks and functions.
I wish they came back to the roots of Technic, actually devoting sets to a technical theme, adding a section in the manual (or online) that would explain the _technical_ design choices (super-car with realistic suspension/gearbox, cranes, helicopter with proper swashplate etc) and provide ideas for variations, further exploration and how this can be integrated with your own MOCs.
Instead we get stuff such as $20 42047 that can't do anything at all. One can add a few more $ and get a semi-decent RC car. And we all know how much the cheapers RC sets from Lego cost.

Same happens with other themes, but in a different way. They builds are becoming more complex and elaborate, which is cool. But doesn't it discourage the younger kids from re-building, since the bar is too high and one needs special parts? The good thing about early Lego sets was that even a total newbie could build something that looked pretty good by the old day's standard :)

Why buy Lego toys if not for rebuilding? Why produce sets that do not lend themselves to rebuilding? So, looks like quite soon we will only see $150+ super-awesome display sets (Modulars, UCS etc) and nothing else. $800 Lego set? Seriously?

Finally, for those who advocate to reduce the number of themes AND kill Nexo Knights: they currently substitute for both Space and Castle. And they have introduced cool elements that work in both! I would love to see proper Castle and proper Space instead, but this will _increase_ the number of themes. Also, I guess this is the last "quirky" theme from Lego - everything else is already mainstream (see "toys" above). Please stop asking to kill them! Ask to replace them at least! :)

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By in Singapore,

Agree with @ickleb. I'm stunned that a US $3.99 Collectable mini-figure has arm and leg printing but minis in the US $800 UCS Falcon do not. I love the LEGO Juniors Cars 3 sets...but the unique (likely one-shot) bricks, which are also fully printed, must not have a high ROI. Or maybe they do, due to lower entry cost that they make up for it in volume? While we are really getting great builds (shapes) lately, in contrast to clunky designs, perhaps the manufacturing cost is becoming too high due to too many unique bricks? Perhaps the customer dollar has become diluted due to higher set costs and too many competing SKUs? Hate to see Ideas go as I believe that while ROI may be low it pays back volumes in brand value with core consumers.

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By in United Kingdom,

capitalism.pdf

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By in United States,

Since Lego is a private company and not public, I am surprised they released sales numbers, but I am sure they did that for justification in laying off so many folks. As for Lego being expensive, it is. But there is a lot that is behind that than just using the excuse "Lego is too expensive." i.e. Amazon. Amazon will buy "x" amount of sets, and then retail them off for whatever margin they want to profit. Now in that, its similar to Bricklink, where folks look at what is selling for what and price accordingly. So maybe it's not Lego over pricing themselves, but also remember to factor in royalties, cost of raw material going up, having to pay for a brand new mfg plant in China as well as expansions in Poland and Mexico. Then also factor in, what I think is the dumbest mistake, hiring 7,000 new people when the company was only a little over 11,000 in a 4 year time period. That must have been an HR nightmare.

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By in United States,

They are greedy and arrogant. The quality of the bricks is poor while the prices continue to grow out of hand. Even when their profits were rising high, they banned retailers from offering discounts on "exclusives" and stopped offering the measly 10% discount in their catalogues. Even though I think they've quietly rescinded the no discount policy a bit, the cash grab left a bad impression on me. And they continue to expect consumers will pay more and more for a bricks that crack, with mismatched colors and spit out licensed themes one after the other, with no creativity.

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By in United States,

TLG has been screwing some things up, we all knew that. They have to restructure and to some extent simplify everything. Lower profit is a good excuse to justify eliminating a whole bunch of employees. Those positions aren’t the essential ones, they’re the “upswing” positions that were supposed to help with further growth and expansion. They were there simply because profit was pouring in and TLG were doing what they could to make the most of it.

I could take this opportunity to focus on TLG’s high prices and decreasing quality (color consistency, hello!). But here it is IMO:

1. Over the last 12-24 months they’ve went from short supply and not meeting demand to over production. They had the most ideal of situations, which they could have maintained by just easing production up. How many new factories have they recently opened???

2. The result of that over production is most retail outlets (need to) consistently sell at 20-30% off. Instead of trying to compete, S@H seems to have even less sales and promotions, which means they’re progressively losing more of their share of direct sales.

3. Rehashing old sets is a big one. Prior to 2015 Lego sets for the most part just weren’t redone. So the value of your stuff used, new, MISB, whatever, was something significant to consider, when and if you every felt like messing with the secondary market. But TLG pretty much killed the prospect of “investing in Lego” by proving over and over that they will go after the easy money by reproducing retired sets. This directly reduced the value of whatever we already own, and also shows us that anything we might purchase in the future will no longer have the same type of increased value due to exclusivity (instead will suffer from over production, see #1). So long term gains have been sacrificed, but apparently there weren’t even any short term gains! Major mistake here that would take a long time to correct.

4. Market cannibalization – more sets does not equal more profit. I can’t tell you how many times in the forum I’ve read how people have stopped buying everything, just so they can afford the UCS MF. The same is true for those of us just trying to budget for Ninjago City, Old Fishing Store, Assembly Square and Saturn V, etc.

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By in United Kingdom,

Shame to see a family owned business lay off 1400 people & act like a faceless corporation just because its net profits are down 3%. Its still hugely profitable. Sort out your customer service dept & the prices and that will certainly help.

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By in Norway,

Even with the desire to grow profits, I don't see how a net profit reduction of 100 million DKK, or even 200 over the full year, would justify axing 1400 people. They probably would have trimmed the organization anyway. Their numbers are still extremely healthy, but I guess some people feel the need to eat even after they're full, to paraphrase a Norwegian saying.

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By in Malaysia,

Because of re release sets and no actual lifespan, over production and now buy 2 free 1 exclusive sets. WTF. Goodbye Lego = Lepin.

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By in Italy,

3 percent loss in profit, 8 percent loss for employees.
All that people make me happy working on amazing sets, logistics, design, etc.
I wish them all the best in their life and I say "Thank you guys an girls!"
I think good stock options or other kind of prizes decided more than failed themes performances

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By in Canada,

I think @Huw hit it right on the head with "...a bloated product range, and pricing its products out of the market". I think Lego stepped put of their wheel house with a few lines and have been slow to cut their losses and stick to what they do best. Also, lego has not adjusted pricing with set size. if you think of buying Lego like buying anything in bulk, the price per unit generally goes down as the number of units goes up. 10c for a 1000 pcs set is fine, but 10c for a 7500 pcs set is too much. No way are the development, licensing, and production costs of a 7500 pcs set 7.5x more than a 1000 pcs set.

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By in United States,

Simple of the profit issues. Made too many sets too high in PPP (like a 60132) and not sets like a 60117, or even a 31068!

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By in France,

what I don't get is that for capitalists, a business has to be consistently growing. even if they are making huge benefits, they consider non-growth like a loss.
from what I understand here, the benefits should be between the level of 2015 and 2016, so very far from bad.

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By in United Kingdom,

As an AFOL I don't know how much I contribute to TLG profits. I hope the big sets like modular buildings, Creator Expert and one offs like the Ninjago City don't get curtailed.

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By in Czech Republic,

to venomsailor. you got it wrong, there is no factory in Poland - its in the Czech Republic and it truly got expansion. More to it, as LEGO re-structualized its worldwide operations, from 2016 on it has building up three worldwide shared service centers, so called BSO (Business Service organizations). One is in Mexico serving the North America market, 2nd in Kladno, Czech Republic (EMEA and Europe) and third in Malaysia / Singapore for Asia.

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By in Germany,

Maybe Lego should lower the prices to sell more product instead of "resetting" 8 percent of their workforce. It's alwas the same, last year those people generated enormous sums, and this year, they will get fired, because of some minor drop in revenue.

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By in United States,

Three-percent is nothing these days, and let's face it, they have done quite well for themselves for the past decade. Though true numbers will never come out, I would be curious where those impacted employees were in the company. Eight-percent is a lot of your employee base. Manufacturing? Marketing? Sales? Packaging?

And the irony that they are releasing the biggest and most expensive set ever...

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By in Czech Republic,

has anybody taken a time to take a look at the interim report? There are some quite very interesting facts. For one LEGO did have lower labor costs on employees than in fiscal half-year 2016.. the very biggest loss can be found under "Cash flows from financing activities" - change against 2016 - minus 1.6 billion DKK .. compare it to the operating profit, which went down only for minus 280 million DKK

to me this sounds like like exchange rate loss GBP after brexit or expenses for securities in the banks against flowing exchange rate. this ONE AND HALF BILLION LOSS is the reason why they are letting ppl go.

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By in Belgium,

It's just an excuse to clean ship. A healthy discussion for a big company.
You can't wait till all go to shit (like many companies do).

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By in United Kingdom,

I have read a LOT of posts saying that Nexo Knights is a weak line. I think they are awesome. The child in me would love those sets and I am a tad gutted my little boy is not quite old enough for them. Also, why oh why do people keep having a go at Lego Friends for being sexist? Surely it is more sexist to ignore girls. No one makes a little girl buy pink, girly stuff but like it or not, there are millions of girls that love pink, girly stuff so to not make those sets would be sexist. As it happens, the Friends line has been one of their most profitable I gather and continues to be.

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By in Sweden,

I found the entire TLBM and Star Wars RO sets at a 50 % discount at a local toy retailer. I have never seen anything like it in my entire Life, obviously this year's sets are selling very badly.

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By in United Kingdom,

A second thought. In the run up to The Force Awakens, a huge swathe of AFOLs came out of their dark years and as a result HUGE amounts of Lego was sold boosting profits immensely. This is obvious by the huge increase in Facebook groups, online sites, YouTube reviewers etc. Now things have settled a bit. Although I am sure that Lego knows all this. But yeah, laying off huge amounts of people does stink a bit, especially from a business that does market itself as being so ethical.

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By in Czech Republic,

You are all discussing what lines should be / should not be ended - and you are all totally wrong. Its not about the themes - take a look at the interim report! drop in sales cca 250 mil DKK wouldnt justify cutting jobs. Especially in the mid-year and not at the end of regular fiscal year - the biggest sales season is still ahead.

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By in United States,

I'm just sure the reason is one of my pet peeves about lego and not some complicated business thing I have no idea about as I have never managed one of the largest toy companies in the world.

It just has to be that one issue I constantly go on and on about! I'm very confident because my ignorance on the matter means I have no information to doubt my claims!

This is a convenient excuse to fire a bunch of folk though.

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By in United States,

'Reaching more children everywhere with the Lego experience'. How about stopping with the greedy pricing? When exchange rates are taken into account, many sets in Europe cost at least 20% more than in the US, sometimes 30 or 40% more (this is the case in Italy, where sets are pricier than in Germany!).

So, maybe Lego could stop thinking that we are fools?

And how about the ridiculous price increase in collectible minifigs? Just sayin'

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By in United Kingdom,

Pricing has to be one of the main reasons for the drop in sales. When you increase the price of minifigures from £1,99 to £2,99 you find yourself asking are they really worth it. At £1,99 they are an easy purchase as they not too expensive for what you get. When you increase it to £2,99 then all of a sudden it makes you realise just how expensive they are. Then it gets you to thinking about the cost/value proposition of other sets further up the food chain and eventually you begin to think everything is just that bit too expensive at full price.

Also do we really need sets like the new UCS Falcon - I mean don't misunderstand me the model is unbelievably detailed and awesome. But worth £649? No I don't think so, for that I could buy a good mid to upper range laptop, a decent digital SLR, or any number of other products that arguably cost more to manufacture than a bunch of generic bricks with a few special ones thrown in to make the model look that little bit special. I would love one of those falcons, but realistically I cannot justify spending that sort of money on a box of plastic bricks.

This in some ways is a sad proposition as there are bound to be many lego fans in the same bind as me and the majority of these sets will probably end up being snapped up by speculators who will wrap it in bubble wrap and stick it in a back bedroom waiting for it to be discontinued and the price to spiral stupidly out of control. I truly wonder just how many will actually ever be built, I suspect only a small fraction...

All this can do is cause dissatisfaction among collectors/fans who may then just give up as the true gems are out of their reach and go to find something more affordable to invest their hard earned cash in...

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By in France,

LEGO must come back to its genuine spirit: a toy for children.
Don't make me wrong, I'm an AFOL but I think that over time, LEGO has become a luxury product.
And less and less people can buy it. Maybe it's the ransom of the licences...
Anyway, as stated by many of you, LEGO should reduce its pricing and try to avoid transforming this wonderful toy in an object mainly for collectors.

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By in Czech Republic,

Duh! its like beating a dead horse, no one is listening, everybody too lazy to open the actual interim report and see the SOLID FACTS for himself. repeating the cliché "lego has to stop producing so many lines".. "lego has to discount its sets".. the issue here is not that ppl wont be buying sets because of the extremely high price, the reason why LEGO is letting people go is that is suffered 1500 million DKK loss from FINANCIAL OPERATIONS and not on the SALES!

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By in United States,

While it has partially been due to my poor health in recent months, I've only purchased a single set this year. Prices are just getting out of control on some things. $80 for Kylo Ren's TIE? $110 for the Resistance Bomber? Absolutely not.

It's such a stark contrast from last year's Rogue One line. Everything in that range was priced to sell, and sell it did! I bought the entire wave, excluding the buildable figures.

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By in United States,

Price is definitely part of it--and I'm in the US so my prices are already pretty good compared to others. It used to be if I liked a set, I'd likely buy it. Now if I like a set, I have to put it in the list of other sets I like and then pick which one I like most. A one-man fighter like an X-Wing should be $40-50 set, not $70-80. That said, I'll be buying the UCS MF, so I'm certainly doing my part.

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By in Germany,

I don't know how it is in other countries, but in Germany I have the feeling people prefer to buy from ebay second-hand bricks or sets, which were only built one time and displayed, rather than pay for a new set simply because it's much cheaper. The Technic Porsche GT3 sells on second-hand market online for as little as 150€. Now I regret buying it from the Store as soon as it hit the shelves, because I still haven't had time and space to build it up. There are just too many (expensive) sets that get released and my funds are limited. And because of this I look for online bargains with at least 20-25% off and only go to the Store when they have free promos or exclusives.
I was shocked when I saw the collectible minifigure price went up to 3.99€, considering that all parts are outsourced and manufactured in China, Hungary, Mexico, etc and "build yourself" ones in the store still are 2.50€. So now I will wait half a year till Ninjago minifigures will be 50% off in the Store like Batman or Series 17.
I think LEGO needs to do more surveys on their existing product line and release less sets of a particular theme. During my childhood there were zero IP sets and the sets had great play value. Nowadays sets are designed and bought to be put on display (ideas, Architecture, Creator Expert, UCS, Buildable Figures, etc.).
My message to TLG: Less is more!

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By in United States,

I may be overstating the obvious here, but smaller inexpensive sets are just plain going to sell better, unless it's a set that no one wants.

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By in United States,

So... sounds like most think LEGO prices are ridiculous (me included), but how many are willing to make a stand and not purchase thousands of dollars, or whatever your currency is, on LEGO each year to show them we don't agree with them? We can complain all day, but our wallets tell them what we are or aren't willing to accept.

Some said LEGO thinks they can make anything and it will sell. I think they can, to the tune of 4.4 billion DKK in operating profit. I blame social media and sites like this. I love Brickset and other outlets, but let's face it, everyone sees everyone else buying and sharing pics of these sets. They see people with more "likes" and "views" being the ones with the newest product, and it seems to be turning it into a competition to see who can post their pic or video first. As long as people need views and follows, enough will keep buying new sets at outrageous prices. Hence the green light on an $800 Star Wars set. They wouldn't make it if they didn't know all of us suckers wouldn't be able to resist.

I agree that LEGO has been producing too many dang products, but it seems like they think it will feed into them continuing to raise their revenue and profits. They don't seem to be okay with any fall in revenue, but if they stopped developing so many new sets, I think their revenue would drop substantially. Then who knows how many they would have to let go when they're only bringing in 2 or 3 BILLION DKK ... in PROFITS! Doesn't profit mean after cutting all the checks?

Love my LEGO, but seeing a company trash 1400 employees after bringing in 4.4 billion in profits makes me wonder if I am willing to take a stand and close my wallet. LEGO used to stand for something, but I guess in the end, money is all that matters.

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By in United States,

@apcsb..

MegaBloks is not 'much smaller' than Lego. Well, the MegaBloks division might be, but their parent company Mattel certainly is not. And Mattel has bought so many other companies over the years that their catalog is extremely diversified from Barbie to Hot Wheels to action figures to board games, etc etc etc.

The whole purpose of MegaBloks is for Mattel to get some quick cash from the person who went to the store to buy Lego, then turned their head & saw a lower price tag & thought, "Oh.. little Timmy will never know the difference."

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By in New Zealand,

A 3% drop is definitely not the end of the world.

I think it is probably the start of a trend though, and that will be what is worrying them. Going through the comments here and elsewhere it seems to be the same issues that keep cropping up. They also fit my own experiences.

1. Price - Sets are just too expensive.
2. Limited rebuild-ability (for kids) due to lots unique parts and colours.
3. Focus on Licensed themes - less creativity.
4. Focus on Minifigs rather than bricks.

Both my kids prefer my old 80s/90s lego rather than the new stuff. The pieces were bigger, the sets easier to build, and the colours were simpler and brighter.

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By in Australia,

Letting go 8% of the workforce - guess if you are working in a factory located in Europe you are more likely to be shown the door than a worker in China?
How about a space theme that isn't Star Wars or yet another space shuttle model.
No matter how much some in Lego want to kill off Ninjago - this theme has everything, ninja's, dragons, hints of steampunk.
Seems to be a focus on building hype around sets the attract AFOL's

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By in United Kingdom,

Stop flooding the market with (repeat) Star Wars sets and bring back trains!!

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By in United States,

From my perspective as a regular buyer for years and years, I've cut back on buying from the Lego Store.
I LOVE the store, the people who work there. Always fun to talk building technique, new products, the mini-builds, etc. but I've been holding out and wait for certain sets with better sales from other sites, second hand sets on eBay and other stores when they have big sales.
My son and I see just TOO many good sets. The quality is still there. But just so much on the shelf. For 10 kits on my must buy list, they alone are well over $3 grand. Add in the mid range kits and small sets, I can't sustain all of it.
Also I'm a model builder since I was a kid and love military kits. Well, I've turned to Mega-Bloks/Constructs for their very recent (last like 2 plus years) of military models. The brick quality has gone up, they print all the decorations and the build techniques rival Lego.
At comic conventions I see the knock-offs eating into Lego's profits. There are a tremendous amount of bootleg minifig dealers. They seem everywhere on the exhibitors floor. You can get like a case of chinese knock off figs (like 50 minifigures for around $10 bucks on eBay) and sell each for $5 apiece. Minifig collectors don't need to buy the kits to get the figs they want. These guys have 'em all, and figs that Lego doesn't make.
I try to tell parents to be careful kids don't put them in their mouths. The printing on some can rub off, and don't know how well the paint applications are on them.
On a final observation, the Force Awakens just didn't get the hype on their sets as well as Rogue One. And the Batman movie kits coming out all year didn't have the juice. Great kits, but no buzz.
I think those kids clubs can help. I used to do them with my son and it was a great time and it promoted many themes each month. Good way to foster community with Lego and parents and kids which is STILL the main group to sell too. Plus keep pushing the Lego Robotics League's too.

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By in United States,

I would never say that I'm happy to see LEGO take such a hit, but the prices of LEGO sets recently have just been unacceptable. I've just graduated from college and landed a nice salaried position, but I still can't convince myself to pay $90 for the 515 piece 60132 Service Station. After 3+ years of LEGO bragging about marking up their sets by something like 25% each year, I don't feel bad for them. I do feel bad for the 1400 employees losing their job because the Kristiansen family "isn't making enough money anymore" though.

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By in Canada,

I agree that MSRP price makes no sense. As a consumer, the only way a company will listen to me is with my wallet.

I've learned over the past years to not buy any LEGO sets unless it gets retired or it drops at least by 30% from MSRP (excluding big sets, 15% is usually the maximum you will get).

Unlike most people, this year has been the year I spent the most on LEGO as my income went up by a lot. I spent 31% of my income so far this year on LEGO. 31% on Kijiji (same thing as craigslist) and 69% at stores. If I check more in detail, I wouldn't be surprised the average price paid is 65% off MSRP.

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By in United States,

How about some Classic Space and Classic Castle? All these licensed themes are played out and too expensive.

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By in United States,

I think Lego has tried to branch out a little too far in the recent years. Many of the price tags on 2016-17 sets are absolutely ridiculous, and the number of current themes is overwhelming. Hopefully, they'll learn from this!

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By in United States,

This may have been stated, but the company needs to pull back on the huge sets. They used to be a nice cool novelty. Now they are a constant. And they don't make it easy for Mom and Dad.

Let's look at The Last Jedi. Whoever at LEGO thought this was a strong opening line-up for a movie wave was not really thinking it through. You have got to have multiple price points, and some true 'entry-level' stuff, for gramma to pick up for the kids. The cheapest thing I saw was the Resistance remake of one fourth of the Troop Transport, whatever that's called. But even that ain't CHEAP.

Where are the 14.99 packs?

And don't get me started on TLBM overkill on product SKU. Way too much crap. Cool crap, Just too much. But at least there were some entry and mid range items.

The Creator theme this year felt like a shotgun blast, not a marksman's rifle like in previous years. City is nuts with the 60-160 and up sets and a lot less of the smaller vehicles.

The IDEAS stuff this year was solid, but the most affordable piece I'm seeing get clearanced out already. The other two? Intense in size and price.

And the Modular happens to be the most expensive thus far.

We've only got so much money to spend and so I think my mentality has been I walk away from entire blocks of product just because I can't afford it, or I have to wait for clearance. Clearance or sales hurts TLG bottom lines, do moving forward they just have to make some adjustments and next year steer the ship differently.

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By in Australia,

I get the feeling the Ninjago Movie sets will do better than the LEGO Batman Movie. They are better value and, more importantly, scale better with City sets. I still love my Ice Cream Truck from the LEGO Movie, it's quirky and it fits perfectly in a City scene. Having a Batmobile that dwarfs even Modular buildings makes it pretty useless outside of its' own theme. The only Batman Movie set I liked enough to buy was the Penguin's Arctic Roller set because it was creatively built and was just believable enough to be a rediculous vehicle belonging to a rich guy in a City.

I hope LEGO doesn't become too risk averse, as some of the sets they are producing for LEGO Ideas and the Ninjago Movie really point to an exciting future. I agree with many others that Trains and (real) Castle make a comeback. I hope Castle still appeals to modern kids, but I guess LEGO needs to remember who buys sets for kids ultimately: parents. Parents may be willing to splash out $20 on a NEXO Knights set a kid pesters them about because they've been marketed into buying it by a cartoon, but they're less likely to buy a $150 set which looks like a fluroscent pile of plastic junk than a beautiful historic looking building that still packs in plenty of play features.

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By in United States,

Too many themes, prices rising too quickly, and what seems like a general lack of attention and design for many of the smaller sets are all things that contribute to this IMO. Of these the most annoying is honestly the crazy amounts of themes. With two Batman themes, two Ninjago themes, and a rising amount of girl themes (Friends is great, Elves is okay, and DC SHG is ridiculous), the amount of themes is just overwhelming.

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By in United States,

I feel they let their year after year success get to their heads, and lead them to overconfidence in their product, causing them to create more themes then are sustainable, and to feel confident enough in their consumer base to raise their prices (NOT a fan). It's time they learned that LEGO is getting too expensive for their consumer base, especially with the overpricing in licenced and specialty sets. This is just reality catching up with them.

On the other hand, other economic factors may be to blame, such as Brexit, as well as the possible looming bubble burst (just look at the U.S. stock market. It's not hard to tell we won't be seeing record gains forever).

Lastly, firing 8% of employees for just a 3% decrease in profits over a half year seems a bit of an overreaction to me, especially when the prices could just be leveling out, and we haven't even seen results for the Christmas season.

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By in United States,

I think that there are wayyy too many licensed sets and barely no new and creative original themes. I miss the old days when we would have themes like Power Miners, Bionicle, Atlantis, Monster Fighters, Space Police, etc.

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By in United States,

For a supposedly very Lego-friendly website, there sure are a lot of Lego haters sounding off here! That is bad news for the future of Lego, IMO.

Not saying that I disagree. I REALLY love Lego, but I think they have almost out-priced themselves. Which is why I have no problem buying knock-off minifigures. And I usually catch all kinds of grief from folks that are regularly on this site. But now it seems like there is a real backlash against Lego??

Is the Lego bubble bursting? Time will tell, but it certainly looks like that might be the case.....finally.....

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By in United States,

I feel like many that have already posted their thoughts in thanks LEGO has overreached, oversaturated, and is making the similar mistakes they made in the late 90s and early 00s. They're just not really listening to their customer base that well. Sure they use tons of focus groups but ultimately who's shelling out the money at the register? They also aren't keeping tighter reigns on their third party retailers and contractors. Example being Legoland releasing TLJ kits prematurely along with not enforcing release dates with big box stores. I love LEGO but it seems the success is getting to their heads and greed is catching up.

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By in Sweden,

Sets are coming and going in such a frantic pace that you lose interest and continuity. Also the prices have become ridiculuous, especially for licensed themes but also for the City range. So nowadays I wait long, use online price-comparing tools and buy sets only at significant discounts; often I get 30-50% off RRP.

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By in Canada,

Just to add a few points

1. Lots of great sets to choose from, but that means you are tempted to buy A LOT to keep up.

2. Salaries are flat and not keeping up with inflation. Most have the same buying power as 5 years ago, yet have to buy foods and goods at today's prices.

3. I love the big amazing sets, but personally I prefer to get the buying high off CMF or cheaper sets. It 'feels' wrong dropping $200+ on a toy (for yourself).

4. LEGO was always expensive, but the great fluctuation in pricing, for example, the relative deals of the new Ninjago Movie sets and generally CREATOR, tells me that they have room to adjust pricing down but choose not to.

BUT

In LEGO's defence, to (and to contradict myself!), while I usually balk at LEGO prices and wait for discounts, I'm also shocked at the prices of other toys of inferior quality - like $10-$50 STAR WARS action figures which are usually devoid of charms and are made with cheap plastics. Consumers are getting hosed across the toy-world it seems....

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By in Switzerland,

Too many sales for me to purchase even heavy discounted sets, so not so much interest in full priced sets. When I saw mf ucs first thought was- unless 30% discounted I'll skip. Also used sets can be bought for peanuts and more an more even 30-50% discount is not enough as I can buy on various sales used sets in bulk for nothing like: https://www.ricardo.ch/kaufen/spielzeug-und-basteln/lego/lego-star-wars/lego-star-wars-diverse-sets/v/an934663000/

And even ucs can't hold second hand value

https://www.ricardo.ch/kaufen/spielzeug-und-basteln/lego/lego-star-wars/star-wars/v/an933601892/

Private sales are even more insane when folks are clearing what became for them silly dust magnet.

Simply lack of ideas, focus on minifigures instead creativity and flooded market resulting in this for now just slight profit drop is a small warning. If they don't do something soon, we will see more such reports in the future

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By in New Zealand,

The price in NZ is the biggest obstacle I think. As Lachlan McGowan said above, we are getting reamed when compared with the US price. Here are some examples.

UCS falcon NZ$1499.99. That converts to US$1084. On top of that if we cannot buy it in NZ, we have to pay import taxes. For the falcon it is about NZ$300. So the price for us works out to about US$1300.
Disney Castle/tax converts to US$523 (Compared to US$349 buy price)
Ninjago City/tax converts to US$523 (US$299.99)
Saturn V/tax converts to US$174.55 (US$119.99)

Even the smaller ones are that same without the import tax:
Battle Packs US$18 (US$14.99)
Hulk Arena Clash US$72 (US$59.99)

And even with NZ prices and tax, I could get both the Disney Castle and Ninjago city instead of the USC Falcon, get an extra 1000 pieces and save $200.

The only time we buy sets is when they are on special. Between the four chains that sell lego here, there are usually 20% sales every 2-3 weeks. That is usually the best we get, except some of the large NEXO Knights sets which obviously aren't selling that well as we have picked them up 50% off.

Our whole family has developed a love of the lego products and are lucky we are able to afford quite a few sets each year. But I certainly think if the prices were slightly lower, and the products lasted on the shelves longer than 8-12 months we would buy more.

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By in United States,

@Radarshane Price of healthcare

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By in United States,

There are always solutions to problems.....

1) My minifigures are getting sick of the same non-healthy food. You can't tell me people think hot dogs, pizza, and ice cream are healthy products. I myself was looking forward to 2015 and the return of construction as I was hoping LEGO was going to pair it with farming as it did in 2009. YES it has been 8 years since a standard LEGO minifigure has had a HEALTHY meal!! Make your minifigures happy and in turn it might make your customers happy.

2) Try selling the trains in smaller kits: Engine, rail cars, passenger cars, track & power pack, etc. The $150 to $200 on a train set for a 5-6 year old much send most parents into "heart attack" mode. If LEGO TRULY caters to the kids how come some of those sets aren't more "KID" priced? If you have the smaller train kits at "allowance affordable" levels they can buy more, more frequently. I suggested this idea to LEGO when I worked there, so far nothing has come of it. I am sure they look back at when they sold it like this and don't see profits. With LEGO gaining so much traction since then and opening so many more LEGO retail stores, I think the time has come to TRY!

3) Some AFOLs are ignorant to the fact that LEGO's core market is 5-12 year olds. AFOLs do however show their GREAT custom creations to millions of kids every year helping kids in turn get inspiration for their creations. AFOLs do spend a lot but our needs never come first and we as AFOLs have to learn that. The Community team rewards AFOLs for expanding the boundaries of the LEGO brand and we need to be more thankful for what we DO get.

4) Pick-and-Build wall has seen so many attempts at luring people to the wall of bricks that they keep forgetting to look outside the box and see what makes the wall so good. I myself probably have at least a million pieces just from the wall. LEGO needs to make the wall exciting and fun as kids generally have enough ideas in their head to buy what they need. The lack of options is what makes the wall need so much help. When I was in the stores as an employee the store I was at had one of the best walls in the United States because I listened to the customers and ordered pieces(when that option was still available) that would be exciting to build with, also having an unstoppable passion for the brick helped. After the control of what to bring to the stores was gone I heard a lot of parents say "my son wants to build a house but you don't have big slopes for a roof", or "where are the doors and windows to get into the house." When I worked for LEGO I believe others above me only believed I was looking out for the AFOLs instead of investigating and finding out the truth behind what I ordered or why I made the suggestions I did.

5)How about alternate builds on set boxes? I heard a lot of "My kid builds the set and then it goes on the shelf". For those parents it would be helpful to SHOW them that alternatives are possible. I could voice it all I wanted but without a visual aid a lot of parents just couldn't see it. When I was a kid there was alternative models(no instructions) on the box which showed what else was possible. Just pulled out my box from 6954-Renegade from 1987 which showed a couple of alternatives. OR perhaps include an IDEA book of sorts within the sets showing some of the alternatives the designers came up with when building with the pieces from the sets.

There are always ideas out there to help make the brand greater than it is, BUT is LEGO ready to listen to Fans of the BRAND outside their company?

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By in United Kingdom,

I use to think it was cheaper than a drug habit but now I'm not to sure....
I use to buy regularly from the Lego Store but now the only items I get are the exclusives, the true exclusives, but even then they are too expensive.
I now search for the sets I want on the internet but only buy when it's a discount of 30 -50 %. Case in point the Wonder Woman and DC super hero girls sets which where 50% in Toys r us, they mostly should have been that price at rrp. the wonder woman set is not a £30

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By in Australia,

I totally agree with all of TheVisionIslandsReed's above points. LEGO needs to get away from being a "collectables" manufacturer and, dare I say it, they are listening to AFOLs too much. LEGO is a toy of limitless possibilities, they need to get back into the Ideas Books they produced in the 1980s, they need to have alternate models printed in every sets instruction booklet they produce, they need to show LEGO is a dynamic inspiring wonder-toy, and NOT a model kit to produce shelf eye-candy. Take a leaf out of JK Brickworks mindset, show the amazing things LEGO can do. I don't care if you're distraught you can't get your hands on that SDCC exclusive Minifigure that you really only want because you can't have it. What are you going to do if you did get it? Stick it on a shelf and quickly start obsessing over the next one you don't have? Perhaps even never take it out of its' packet because it's too valuable? That is NOT what LEGO is about in my opinion.

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By in Australia,

I am very disappointed in this. Ole sacked workers due to the Depression and later rehired them, modern Lego fire workers because they are extreme capitalists and have no intention of rehiring them in the future. Redundancy packages… the old giving the worker a wad of cash which is nothing compared to the company profits and a notice of services no longer needed. “May interefere with their lives”, you can overprice products Lego, but making remarks like that is just despicable and a disgrace.

Same thing happened with Disney, when the original, honest, altruistic owner died, so did the company and all the values that made people like its products. Now both are huge money hungry corporations who make a lot of stuff people don't want, and most people only buy the products because they have the hope of the company returning to its original values someday in the future.

I am so disappointed to have to speak negatively about Lego. jedibricks82 said we should just not buy the products, well then it would be a no win situation. I still love actual bricks, the actual product and will continue to buy it (unless all the sets I am interested in are just too expensive to buy), even if the company who makes the products is another greedy big business.

I never really thought about Lego releasing too many products before, although, yes they do have too many themes.
Easy solution:
go back to the original themes Town (ie City) Space (ie space police, mars mission, galaxy squad), and BRING BACK HISTORICAL THEMES. Get rid of this stupid Nexo Knights and bring back classic castle, pirates and wild west or some other historical time period. Children need to be taught about history, not put in front of screens all day.

Next, stop making so many licensed themes. If there was no Lego Star Wars or Superheros to waste time on then Lego would be better off. They should also perhaps make trains a separate theme like back in the 90s, that would reopen the market of Lego train enthusiasts. Although I hate themes like Ninjago, Chima and Nexo Knights, these are all still original Lego ideas that did sell well instead of relying on a name (ie Star Wars).

Bring back Adventurers (an awesome theme) and I think Sports would be a great one too. Although I personally would not be interested in Sports as a theme, the rest of the world, especially my country, would love it. The idea of a soccer game that you can build and play with was great and since Lego has a partnership with the German Football Team they could include real players. Although, with their current ethos Lego would make a Sports theme but then focus all their attention on a Lego FIFA (the tablet game) rip off.

This focus on ‘digital ways of reaching children’ annoys me, and this obsession with coding etc. Boost is an alright idea, its nice to at least see real bricks used and not Technic and computers/tablets/phones, but they are pushing it too much. There is enough push for coding and computers in the world already, we need tangible things to do stuff with and to talk to people.

Lego Life really took the biscuit in annoying me . They ended all focus on the best digital and brick collaboration that was beneficial to all Lego fans of all ages (LDD) and also all the other good digital things they had, such as DS games (now its all PS4 and tablet with TV….).
It’s just some of the activities from the old website put on yet another data chewing app! Any child over about 8 will have no interest in it, its all just games (when there are better ones available both non Lego and Lego related such as Lego Worlds, which they also have completely ignored despite having lots of potential) and photo galleries, which will be instantly made outdated by social media and are only used by parents wanting to boast about their children , while the kids who actually make good MOCs are the ones who have do not pictures on the gallery.

The Lego Batman Movie was a partial cause because the movie plot was not as well written as the Lego Movie (TLBM also was a lot more orientated towards young children wh

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By in Greece,

"Brickchap said":go back to the original themes Town (ie City) Space (ie space police, mars mission, galaxy squad), and BRING BACK HISTORICAL THEMES. Get rid of this stupid Nexo Knights and bring back classic castle, pirates and wild west or some other historical time period. Children need to be taught about history, not put in front of screens all day. TOTTALY AGREE!!!!!!!!!!!!!!!!!!!!!!!

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By in Greece,

Iam 37 i have buy a lot of sets but after the 2007 the sets of lego are not for play.
They have to see the past products that was best seller.
Give to people sets like lotr like hobbit modulars building and you will see products shell again
no more stupid products lego dont buy litle kids but people older than 30 years old.

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By in United Kingdom,

Not sure if anyone else has mentioned it, not read all 150 comments... but surely just days away from the release of the UCS Falcon and presumably before Force Friday II sales are in...... couldn't year end change substantially IF people buy the new Star wars sets. Not sure how much profit is on a UCS MF but either no-one will buy them at that price or People who don't even collect Lego will buy them as investments, based on the 2007 profit margins 3 months ago. They could sell 1000's. I know a few people thinking of buying 2..............

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By in Japan,

I have found myself cutting back on purchases recently. I find what I get in bricks hardly reflects what I am paying for anymore. Other lines just sputtered out to me. I still love the sets I got for those lines but their subsequent waves were not as interesting for me.

I also suspect their recent expansions overseas, with factories and LEGOLAND parks cut into their revenue stream a bit. Plus the size of the market on the whole is getting pretty fierce. As kids grow up they get into different things and this could be that trough slamming into them at the moment too.

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By in United Kingdom,

It's been said over and over in the above comments but I do think Lego has just become too expensive for the masses, especially where licences are involved. Take the Joker Lowrider for example: £54.99 and all you basically get is one car and few figures. Regardless of the number of pieces and the "price per piece" ratio the overall feeling is that it just isn't worth the money you paid. Over the last couple of years I've had that feeling a lot which has meant I'm much more cautious in what I buy and often wait for big discounts even if that might mean missing out.

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By in Greece,

The lego company has sacrificed its own success in recent years, it has acquired arrogance, it has to return to its old values, it is the biggest investment it can make now and not to spend money on unpretentious promotions, on non-productive sets, and on an attempt to persuade us to buy what she wants only without listening more closely to its costumer base.
one example,they bring back castle theme ok?Have given their importance and their value to them?certainly not,the old castles were true, historical, they helped the children in learning.The figures, the weapons, the many parts they see similar in museums, and they feel proud that you were similar in tiny size in a drawer of your home.
How difficult it is to have a theme around the history with accessories,figures,buildings, simply-cheap sets or bigger similar to old sets but adapted to the current market???
?They have tremendous responsibility for many mistakes they have made in the recent past and today,was saved from bankruptcy some years ago, managed after that to become the largest toy company but did not have the competition it now has, I believe should understand its mistakes if it wants to remain a leader

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By in United States,

this is just greed, they were still very profitable, they just made less, there was really no need to lay off all these people, its the typical kneejerk reaction these CEOs do to try to prop up profits and it doesn't solve their actual problem of sagging sales
I completely skipped their Batman Movie sets because they were overpriced, and they keep making Marvel sets based on the movies when alot of fans want sets based on the comics, and then they end up losing sales to the bootleg minifigure market because of that

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By in United Kingdom,

A LEGO set's core attribute is play value. I agree with a return to simpler Space and Castle themes, especially a return to high-versatility pieces and a reduction in single-use pieces. The passenger train nose has fallen into this trap again.

I agree that there are too many themes. So many sets come and go without me ever knowing about them, unless I read Brickset more often! The new Shop at Home website makes it more difficult to find things too, needing a reset between themes.

Whilst I have enjoyed a few of the special pieces from Nexo Knights, I have been very selective in buying the sets that have the parts I want. I did watch the cartoons to see the point behind the theme. Since NK moved from lava monsters to rock monsters, the primary bespoke pieces were not so useful so I didn't buy them. These days I look at what is significant in the cost of a set. Even in Technic sets, with the panels averaging £1 each, it's "no re-use, no purchase".

Another mistake was letting the nice Friends colours leak into Technic. We don't need four shades of blue for Technic. I have avoided Azure panels, such as 42070 (quite apart from its inflated price). Another point in Technic was the lack of a £7.99 stocking-filler set at the bottom end of the range this year.

Even my favourite theme is split into "Buy one and more on discount", "Buy on discount only" and unfortunately "Miss". If the few sets of other themes that I like are available then I'll buy them, but I won't pay over RRP for an Exclusive set; if they all go to resellers then I'll let it go. As such I split my purchases between a LEGO shop for any exclusives and a local chain for the discounts. The LEGO shop can get more of my first-of-multiple sets with the AFOL discount.

With the expiry of the original brick patent leading to more clones, more has been made of minifigs in recent years. Minifig collection seems to have worked as a theme, but it's not for me. As for Brickheads, whatever possessed them? Between those sets I see a similar set of internal pieces supporting a SNOT-sided head, and the whole stuck on a brick body, for an inflated price. They are collect-and-display products, not play products. We know from exhibiting that the movement of models creates a lot more interest than a static display; the same is true of the product in the home. Hands-on wins.

I agree with others that Star Wars sets have gone off the boil. Too many versions of the same thing, also lacking lustre in the new-film ranges. I hope BB-8 and the new Millenium Falcon will fare better; I was hoping for a moving BB-8 (given my earlier Ideas project) but the design looks good even in plates. It would be easier if the Falcon came with a free dining table; I have to forego some purchases on the basis of having insufficient display space at home.

From an AFOL perspective, a small part of the market, TLG wanted more of the sales of parts to go through all their departments, not just selling bulk bricks. In theory this would help to justify those other departments as contributors to those sales. Unfortunately it is difficult to manipulate the customer in this way. As we grow our collections, we have so much already that we are more selective in considering the relative costs of buying sets for the parts and buying individual parts even at a premium price. TLG needs to maintain customer value, both play value for all and parts value for selective builders.

The trending growth of digital in play continues to be a struggle for TLG. Kids might expect digital but I stick to just bricks. That rules out the Dimensions theme for me, and also building the 2nd model of a large Technic set off the screen. I have the RCX and NXT but didn't see the EV3 as going far beyond that. Power Functions is good and versatile, which complements the key play value of the sets. It needs to stay that way.

The reduction in workforce will be really sad for the whole company, not just the 1400 people made redundant. Given the family culture, the loss will be a huge bereavement.

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By in United Kingdom,

Too expensive, Too many specialized parts/Underused parts, Too many themes, Too many sets that don't promote creativity "Pretty much every licensed set"

Hardly bought any Lego this year due to other important things in life and the fact of Lego at least in the UK is just getting too expensive to justify. They can keep their Hundreds of £££ sets its supposed to be a simple toy for the most part.

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By in Austria,

DKK 3.4 billion equals to 545 million USD and that's only half a year of NET profit. And it is just a 3 percent drop of net profit compared with a year before, while it has grown year after year in the past many years. It is still a very healthy figure in my humble opinion! What is the justification to axe 8 percent of staff?

I understand that many manufacturing companies are now talking about higher level of automation in the future. Well, the amount of 545 million USD can already go into investment of more automation and other advance stuffs. And there is no close competition of Lego in the market.

With the analysis of which product line is good or not, it is too vague because that is not in major contributing factor here at all. You can start analyzing, if the company starts to earn much less money (or losing), but not in this case.

So in summary I can only see greed in play here, unfortunately. And I already saw it 4 years ago, when news came about the company's decision to setup the China manufacturing plant.

That being said I'm agreeable to many of your analysis about Lego drifted away from the original building block system concept. Yes the play value has suffered, and it look more like a model nowadays, than a creative building system. I recently found a few instruction booklets of Lego classic sets that my parents bought me 28 years ago, and I showed it to my kids. They were amazed and exited already by looking at the customization capability. And those toys were, 28 years ago.. How time have changed.. To the better?

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By in Czech Republic,

Prices in UAE are double US list prices (UAE currency is pegged to the US dollar so no excuse). I don't buy much except for when I'm in Australia (which is still too high) or I get people to bring some if they come and visit.

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By in United Kingdom,

Bring back Mixels.

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By in Canada,

I've noticed how expensive the star wars have gotten over the last few waves. The cheapest set in the upcoming movie wave is $40 CAD when just two years ago that would be the third or fourth cheapest set. I'm also dumbfounded at how many sets are priced over $100 CAD, I feel like maybe half of the sets are near or above that price.

That, coupled with the fact that there are numerous video reviews of each set that point out every feature (and flaw), has led me, personally, to be turned off many sets.

I hope the fact that home grown themes are the best sellers will change LEGO's strategy and focus more on its core themes. The whole appeal of LEGO used to be that you can build anything out of it but if half your products are Star Wars and Superheroes you're really getting away from the main strength of your product.

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By in Netherlands,

I think lego is overpriced since last year. There are also not many small sets to buy for kids birthday parties. It all starts at around 10 euros. And you can see it in the price rasise of the minifigs too. They started around 2 euros and ask 4,50 now at some places. And the news sets... its just more of the same. Nothing spectaculair. Allthough the new ninjago movie sets are pretty cool. Maybe that will drive up the second half year profits..

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By in South Africa,

Lego is greedy and wants more money sadly. Overpriced products are to blame. I used to buy loads of sets but don't anymore. This affects people's lives and now their jobs must be cut. Greedy shareholders too. Lego is not what is used to be and is slowly going to do themselves and others in. No more happy shiny plastic feelings.

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By in Czech Republic,

to audiobean: Because NOBODY took a precise look at the interim report! I have been explaining this over and over. The operating profit dropped only insignificantly by 3 per cent. And as you correctly pointed out its just half season. The biggest sales season (Xmas) is still coming.

The CLICHE being repeated here over and over again ".. because they make too many sets.. because they do not sell well) " Do you think that LEGO does not keep monitoring of the sales on regular basis? IF this was the issue - they would have to notice the declining trend months ago! Its not like they saw the first results for January - June first at the beginning of June! IF SOME THEMES did not perfrom well, they could immediately cut it. Would sold out within days or weeks.. they wouldnt have to introduce new waves..

NO, THE PROBLEM IS TOTALLY ELSEWHERE.. have a look at the interim report and you would see that while the operating profit loss (compared to the same period 2016) is just 260 millions DKK.. then the "Cash Flow from Financial Operations" suffered a loss of 1300 millions DKK! And thats a steep decline! That is the LARGEST LOSING ITEM on the report.

IN my opinion "Cash Flow from financials operations" includes also securities in the banks such as having a fixed exchange rate between DKK/USD or DKK/GBP.. these fixed arrangements cannot be terminated within a month - they usually run for a year or more.. so whatever TLG will do now, they just cant fight the declining value of both USD and GBP against DKK.. they could counter it with higher RRP prices but they know it would be suicidal.. so they have just to wait for the currency rate to go up - or terminate this fixed currency securities..

both ways we will most likely see the loss in this specific balance item also at the end of the year. And if you cant change this fixed rate to avoid losing with every set sold - where else can you save money?

---- by TERMINATING EMPLOYEES.. because this thing is going to go on for some time.. if its the unpopular theme sets behind the loss, you just grin and bear, stop the production - and not lose loyal and trained employees (the training and offset costs would be massive - that nobody took into calculation too).

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By in United Kingdom,

Good article and great posts so far!

Private business cutting staff on reduced profits, fine I guess. But who's to blame? Strategy and marketing and upper managers, not the staff who'll go.
So this is a black mark on Lego for me. I buy Lego and pay the high prices to support their supposed high ethics.

Too much Star Wars and all kinds of weird stuff. Lisenced kits too expensive. I want well priced City, Space and Pirates and Castles for my child to use their *imagination*
Star Wars is all grey and so once a kid uses their own imagination they're limited to grey designs.

More quality kits that give you good bricks to make your own stuff too. I've found the modular buildings best here recently.

Also I messaged Lego in a survey and said they should do white box remakes with digital instructions.
Lego is ALL the same bits over the years, remakes should not be hard for a business like them, even if you have months lead times.
Give me all the Futuron and Blacktron 1, and Space Police 2 stuff and I'd be happy to fork over less cash than that big bland grey pile of bricks that is the millennium falcon!

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By in Czech Republic,

.. and being (living) in New Zealand i would pay particularly very good attention to this part of the interim report

(quote)". .. Finally, in some markets the reset entails addressing a clean-up of inventories across the entire value chain. The work is well under way.”.

so if you have a look at the locations where TLG operates nowadays, which ones are hypothetically in danger? continental Europe? No way. US or Canada? No way either - for whom would they then have Mexico plant? .. China? Speaking very highly of it..

my guess is Australia and New Zealand would be cut.. even now you read here the complaints how totally overpriced eveything is over there.. the logistics to this part of the world is a nightmare, costly, ineffective, slow.. that all adds to enormous prices.. while taking into account also the population in Australia + NZ, it would have to be far the least earning market..

So based on that line I believe that this could be the scenario, that NZ would see no official LEGO presence in a while.

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By in United Kingdom,

I am starting to see them going the same way as in the early 2000s. Too many themes, too many licences to pay for and becoming too big if you know what I mean which is unsustainable.
They need to concentrate on original non licensed sets and bring back some of their own successful themes like proper town sets, classic castle, space and pirates. These to me are the core themes and what Lego is all about. I'm a big fan of the creator expert line which includes things like the modular buildings, world landmark sets etc.
I think Disney are partially to blame for Star Wars sets being so expensive these days. I think Lepin have probably done them some damage proving that people won't or can't pay ridiculous prices just for the Lego brand name, this is something Lego need to consider very seriously.
As much as I enjoyed the Lego movie and the Lego batman movie they are still examples of Lego trying to have their finger in too many pies, I personally love playing Dimensions but I don't think it has been as successful as they'd hoped for and all the licences for the franchises in the game must've cost a fortune!!!
Over the last few years Lego have certainly had a something of a golden age where everything they touched turned to gold but now with people not having the same money to spend as they used to and financial uncertainty people are being much more careful with their money. Lego have also got a bit greedy with their pricing thinking people will pay anything if it says Lego on the box.
I do hope this is a temporary glitch and they come back stronger having learned lessons from this.
They've also splashed out huge sums recently on retail stores, particularly the massive Leicester Square store especially as London was already well covered for Lego stores. I live near Leeds where there is a Lego store, Sheffield is only 30 miles down the M1 from Leeds and they have one, Manchester is only 40 miles away and they have one. Perhaps Lego is a bit too niche to have this many stores so close together, just a thought...

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By in United States,

I for one don't understand why so many people are saying Star Wars and other licensed themes should go. Though the sets are expensive - as with every theme - it's one of LEGO's most popular themes and brings in lots of money. So if the goal is to boost profits why would they axe one of the most popular themes?

In my opinion, if they're going to get rid of any themes it should be:
1. Nexo Knights - I know a lot of people like it, but I think (like many others) a normal castle theme would be SO much better. It can still have fantasy elements like dragons and such, but have it be realistic. Heck, if they really wanted to they could still make a TV show for it. A normal castle theme would still appeal to kids while still enticing adults.

2. DC Super Hero Girls - Honestly this is one of the worst themes they've made in a while, to be honest. I really don't see any reason why people wouldn't just buy normal Super Hero sets.

3. Minecraft - Now I'm not just saying this because I dislike Minecraft, but it doesn't seem to sell amazingly to me, and most people I know would rather just play the game itself. Not to mention they seem to running out of ideas fast. (Rather ironic considering Minecraft is a game with infinite possibilities!)

4. Ninjago Movie - I'm not saying the Ninjago Movie and its sets shouldn't exist, I just think that they shouldn't have done two movie themes in one year.

Another thing I think they really NEED to do is have consistent price ranges for the themes. Have one $20, one $30, one $40, one $60, one $80, etc. Not only would it guarantee that each theme would have at least a couple of easily affordable sets, but it would mean people could plan their purchases much easier.

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By in United States,

Did someone say 1000 comments? No?
TOO BAD! Seriously though, anything i could say by now would already be somewhere up there^
l

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By in United Kingdom,

Out of the (soon to be) hundreds of comments above, the most common ones seem to be "Lego is too expensive" or "Lego needs to return to classic space/castle". Though I do agree with both to an extent, there is no single concrete answer to entice a further audience back in. And we don't know for sure the issues that come with the classic themes now (is Space allowed with Star Wars' Disney overlords? - after all, unlicensed space would be cheaper and potentially more creative than many of the recent Star Wars sets).

However, regarding the classic themes I have been fighting the corner for them with Lego as their unlicensed adventure themes have always been my favourites and I made my regret at their long term absence very clear on my Inside Tour.

I still believe the Lego Movie effect has a lot of power and if WB didn't dilute it by introducing Batman and Ninjago films and cut to the chase with Lego Movie 2, we might be seeing Lego still in the minds of more people. Lego also could do with reducing the crazy price hikes, or at least provide better sale reductions on their own retiring sets to ease the 'I'll just go and buy a second hand brick bucket' effect.

^^ @mrdoofa Regarding the Lego stores, count yourself lucky because I live nowhere near one at all - it would cost me at least £35 to take the train to London so I'm still campaigning for one in the South West (i.e. not Cardiff). But it does prove your point of odd store placement.

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By in United Kingdom,

@The Rancor You're right, it's not particularly the amount of stores it's more to do with store placement. 5 years ago my nearest store was Milton Keynes which is around 160 miles from me. Now there is Leeds, Sheffield, Manchester and Liverpool all within 80 miles whilst there are still huge swathes of the country with none at all. Is there really any need for London to have 4 stores?

Another thing Lego have placed too much emphasis on in recent years is rare bricks in rare colours, for example I'm not going to be inclined to buy a set just because it might contain 5 1x1 cheese slopes in dark azure!!! Or, it's only the 2nd set to feature a certain piece in a certain colour. We all love minifigs and they have been a staple of Lego sets since they were introduced but again too much emphasis is being placed on them now IMO.

I don't think Lego should do away with licensed sets altogether, in fact I've heard that when they nearly collapsed in the late 90s and early 00s it was Lego Star Wars that saved the company!!! The amount of licences they have now must be costing a fortune!!! Some licenses were almost a waste of time obtaining such as the Big Bang theory for just one ideas set or even Doctor Who although dimensions has made some more use of this license. Adventure time could've really worked as a theme being bright and colourful and a little bit mad and surreal, just like Lego but they arrived a bit too late. The angry birds movie sets was a mistake.
I would've been just as impressed with 42056 as a generic super car without the Porsche licence and it would've easily sold for £100 less.
Instruction manuals could be halved in size to save money, they are so over simplified, even for the most advanced sets, using 42056 as an example again there are 5 pages and 14 steps to just put the 6 cylinder engine together and many steps where you just add one piece at a time. I believe that these large sets should offer some challenge to build.

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By in United States,

Honestly Lego is getting so expensive (Star Wars/DISNEY) ita insane

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By in United States,

I see a lot of comments about how the prices have gone up.

That is called inflation. Complaining that a set today that costs $119 today would have cost $100 10 years ago is a bad jumping off point. With that amount of time inflation takes over and prices of things do tend to move up.

That being said, who heres take home pay has actually grown in the last 10 years? In the US the average household income has barely risen 4% in the last ten years, all the while inflation is outpacing household income growth.

The problem isn't just the prices have gone up. Universally the fans take home income hasn't moved enough to be able to keep up with inflation.

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By in United States,

@RoutanClan Just because there is inflation, does not necessarily meant that the prices of a certain product have to go up.

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By in Switzerland,

@RoutanClan

When prices go double like for minifigures series in just 7 years or company fire 8% employees for earning 3% less, that is not inflation but greed in its purest form. And that is cool, huge corporations are money and not sentiment driven, its just that we all remember lego as nice family company but it is no more and for some hard to accept.

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By in France,

It's because of all those stickers.

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By in Switzerland,

Well businesses do not work based on sentiment, but hard facts. If they would be sentimental, they would go bankrupt in 2000 and there would be no Afols today. Is Lego expensive? When I was a child a big Lego cost like half of monthly salary - today it is significantly less. And are you not buying it anyway?

Huge discounts in some stores mean only use of price discrimination strategy - that is you let the rich who do not care pay the full price and you let the less rich find their deal.

The issue for the future is rather too much quality - my sets that are 30 years old are still like new and this leads to market saturation. Degradable bricks are a business solution (apart from being ecological) - but would be the end of collectors...........

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By in Germany,

Threads like this always make me wonder if anyone from TLG is reading all this (and taking notes).

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By in South Africa,

I totally wish they were, especially the CEO!
Good business management is about listening to your customers, as they pay your salary at the end of the day!

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By in United States,

@mrdoofa: The idea that licenses like LEGO Star Wars saved LEGO is something of a misconception. They may have helped delay the company's crisis and kept the company's balance sheets looking nice in years when new movies came out. But ultimately it was Bionicle that kept the company from going under in 2003 when there were no new Star Wars, Harry Potter, or Spider-Man movies to drive interest towards the licensed themes. Bionicle's success ended up serving as a road map for future theme development.

In general, I don't think licensed sets are as overwhelmingly numerous as a lot of AFOLs tend to think — rather, our community just has a really obnoxious habit of ignoring or dismissing non-licensed themes. Like, as of last year, licensed sets still made up only around a third of the LEGO Group's portfolio, same as they had for the past decade. There are more "one-off" licensed sets than there used to be thanks to themes like Ideas and Dimensions, but it doesn't make sense to treat these as if they're equivalent to entire product lines. As a reminder, for 2015 and 2016 alike, the five top-selling themes were Star Wars, City, Friends, Ninjago, and Duplo. Star Wars was the only licensed theme to make that list!

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By in Germany,

Bloated product line pretty much sums it up. Just check how low many, many sets go on sale for. Not only Dimensions, but many other sets can be regulartly had for 50% or more off. They are apparently simply not selling. Pretty much every product line has far too many filler sets by now.

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By in United States,

@Brick Dangerous and others

If anyone from TLG is reading this, they are more than likely laughing than taking notes.

Many here are saying that it is wrong that TLG is laying off employees after such a small profit loss after years of growth, but then they are also saying that TLG needs to lower prices after a small profit loss after many years of growth.

It seems that fans are using some data to blame TLG for "rushing" into a decision (laying off employees) but AFOLS themselves are using this same data to justify a lowering of prices.

I am sure that TLG has a tried, tested, and trusted mathematical algorithm for determining prices. Might this algorithm need a tweak? Maybe, but the point is that they do not just pick a price; there are factors that we are not aware of that factor into prices, I'm sure.

TLG could, I suppose, lower prices because "the fans who buy the product want lower prices" but that would ultimately lead to more problems. (Some ramblings: Lower prices might lead to more products being purchased, but more products at lower prices might still only equal the current profits but there were still the same number of employees to pay and more product sales might mean more production which leads to more production costs... So this ultimately leads to even more loss.)

We know the beginning of the current TLG story--profits are down--and the end--lay offs are coming--but we do not know the middle. Perhaps, TLG's plan matches what many here are saying: less themes. Well, if there are less themes, there will probably be less products. This means less employees are needed across the board: less product designers, less packaging designers, less folks in marketing, and advertising.

Fans are calling TLG "greedy" for the lay offs, but the fans own suggestion could very well lead to layoffs!

We are passionate fans of a hobby. We want TLG to be passionate about us, but we have to remember TLG did not make the LEGO hobby. They made the product for profit. We, the fans, added the heart that turned it into a hobby. We are fortunate that TLG reaches out to the hobbydom as much as they do, but to suggest that the wishes from hobbyist who do not have a full understanding of the company be taken seriously as sound business advice is borderline asinine.

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By in Germany,

^ I really only meant the pretty much unanimous and very verbal demand for lower prices. And you are of course right in that none of us have any insight into the inner sanctum, but I think it is actually pretty simple: If you want my money, you better make a product that I desire, to conditions that cater to my wants and needs (and financial ability). If you don't, well, no deal. So yes, I assume that ultimately, it will always pay out to listen to the (potential) customer. But as someone else said, as long as we don't vote with our wallets, that's all probably moot.

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By in United States,

Compared to the toy industry which grew 3-4% during the same time frame, I guess that is a bit of a concern.

Maybe it was those ill advised trapezoid boxes for the 40170-1: Build My City Accessory Set.

I imagine there haven't been a lot of changes in the size of the LEGO workforce, so I have to question whether staffing reductions effectively addresses the cause for lower revenues or simply offsets lower revenues.

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By in United States,

@Brick Dangerous: A unanimous demand for lower prices is hardly evidence of anything. Nobody is going to argue the contrary ("I wish Lego were more expensive"), and even if the standard prices were lowered people would still prefer getting them at an even lower rate.

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By in United Kingdom,

Regarding the AFOL/actual family with kids audience price comparison, of course adult fans want lower prices but because we're hobbyists, we're often still willing to pay the higher ones - or are savvy to know about deals.

As for the kids audience - each time I go into my local TRU/Smyths, or department store, or a Toymaster - almost every family I see seems to be refusing their kids Lego based on cost - particularly avoiding licensed themes such as Star Wars because they know the homegrown ones offer better value. This isn't proof of some nationwide pandemic but it's quite disconcerting on a local level. Even if you take into account inflation, I don't think Lego used to be perceived as such a 'luxury' toy as it is now. I wonder how much cheaper construction toy alternatives (not necessarily clones) are eating away at Lego's market, particularly outside of the Far East.

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By in United States,

The recent Marvel, DC and Star Wars pricing has a huge role in this. The Arena Clash from Thor 3 is a prime example of poorer product at an outrageous price. Star Wars Battle packs are now $15. The entire TLJ lineup is either crappy sets with decent price/piece ratios or decent sets with awful pprs. Lego needs to get a tad less greedy with their pricing to reverse this.

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By in Germany,

@ Lyichir: Of course people prefer getting things at lower rates. But the extent to which people here and on other sites are actively posting and being verbal about it should give any manufacturer pause. If McDonald's reported losses, I think no one would claim that it's because cheeseburgers are overpriced. Personally, I feel that sets are not just overpriced but dramatically so. I think everyone has a feel for what might be a fair price for any given item that is just formed by experience and observation. When I look at LEGO sets, even trying to take into account material value plus designing, distribution cost and so on, I very consistently feel that they should cost pretty much exactly half of what they do. I would be okay with two thirds, which is what I try to spend (like many, I only buy sets when they're discounted). This is not an "I just wanna pay less" situation, but one where my sense of worth and the reality constantly clash in a bitter way. And I know that this is highly subjective. But do you honestly feel that LEGO isn't overpriced? If so, good for you, but I'd actually find it surprising. I think to say that this is all injustified moaning to save money is not fair in this case.

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By in United States,

@Brick Dangerous

Wow. You "very consistently feel that they should cost pretty much exactly half of what they do". This is why TLG will never take many comments posted on fan sites seriously.

The Last Jedi's First Order Star Destroyer is $159.99 for 1416 pieces making the price-per-piece 11.3¢. Are you suggesting that the price-per-price should be 5.6¢, 3-4¢ lower than any set I could find listed here on Brickset from thirty years ago?

I will firmly go on record saying that I do not feel that LEGO sets are overpriced. Looking at price-per-piece, I do not see that LEGO prices have significantly raised over the years. Yes, some sets today, have a 14¢ price-per-piece, but it's thirty years later...

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By in Belgium,

price per piece istnt a very correct way to calculate the value imho
price per kg would be much more accurate because of all the small 1*1 pieces they now use (or +200 black connectors in technic sets)

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By in Germany,

Also, there's this little thing called recession. 30 years ago? Golden days. Who has that kind of spending power now?
And I'm glad I'm not into STAR WARS. It's bad enough with the City sets.

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By in Greece,

@Brick Dangerous,tomenadi, I'm with you...

your thoughts have meaning, are accepted by most,do not try to persuade people who consider the lego still to be cheap .......

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By in Switzerland,

Lego prices went up 50%-100% in just 10 years (e.g. battlepacks went from $10 to $15 and minifigures went from $2 to $4). And I am not challenging their pricing policy as objective of any huge company is just one - money. But I have serious doubt that such pricing is sustainable as majority of their customers are not afols but parents.

Btw pricing is not a main issue for lego but oversaturated market where there are way too many sets in market and it will get harder and harder for lego to compete with itself - its used bricks. Already now most of my purchases are not eve discounted sets but used bricks. as nowdays regular buyers are geting lego for display, I am getting bricks mint right of the shelf.

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By in United States,

@tomenadi: Price per kilogram is a good metric, but even then, today's sets generally aren't more expensive per kilogram than sets from 15–30 years ago. 75190 First Order Star Destroyer is $160 and weighs 2400g according to BrickLink, so has a price per kilogram of $66.67. $7190 Millennium Falcon from 2000 was $100 ($142 in today's money) and weighed 1936g according to BrickLink, so had a price per kilogram of $51.65 in 2000 dollars, or $73.35 in 2017 dollars. Going back further, 6985 Galactic Mediator (a non-licensed set) cost $60 ($105 in today's money) and weighed 1036g, so had a price per kilogram of $57.92 in 1992 dollars or $101.35 in 2017 dollars!

Now, I know full well that on average, families today can't afford as many luxuries as families in the 80s. That said, from 2005–2015, LEGO was able to thrive, selling more and more sets each year. Was an average family in 2009 or 2012 or 2015 that much better off than a family today? If one year of non-growth is a sign that prices are one and a half to two times as high as they should be, how do you reconcile that with ten consecutive years of growth during a period in which prices were not meaningfully different than today's?

I do not think LEGO prices are low by any stretch of the imagination. I do not, however, think they're any higher than we have reason to expect. It's always been an expensive toy, and for the most part it's managed to be a popular one anyhow.

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By in Czech Republic,

kraken:

ever experienced a situation like this?

You want to get a FREE shipping from the LEGO e-shop - but what the hell! - you are short of 2 quids (GBP).. so what do you do.. you put into the basket a GIFT WRAPPING PAPER for cca 2,50 GBP and think, I got that under control..

.. then.. you receive a LEGO package .. and inside? Just the SOLE GIFT WRAPPING paper.. no set that you ordered with it in the same order.. CustCare hotline explains it that since they had the paper on stock in the warehouse, they shipped it right away so that you didnt have to wait for it.. and the sets expensive not enough (b/c you had to order the paper go reach for the free shipping) .. arrive in another package in 2 days..

ANOTHER EXAMPLE FROM THE LAST WEEK:
SW Force Friday.. somehow miscalculated the order and missed the free shípping by less then 5 penny! - so the full shipping price got in (cca 13 GBP). Next morning (Friday 1st) I realized my mistake, checked the order status and since half of the sets still wasnt in the warehouse (expected to be stocked on on September 6th), I called the LEGO CustCare with a wish to cancel the order.. now you will be probably knocking your head against the wall how LEGO operates..

I was explained that I COULD NOT cancel my order at this moment, since they already had 2 of 4 in the warehouse. But I was welcome to return the whole package after it arrives and they would send me a shipping label for a FREE RETURN.. I protested that this simply didnt make any sense since they still hadnt packed the items for the shipping out and its a financial nonsense for them as well - to pay double (useless) shipping costs! - no sir, there is no other way..

and the best is yet to come.. The reason why I wanted to cancel the order was that when I splitted the shipping costs into individual sets, they were like 20 per cent more expensive than when bought in local supermarket. That nice lady on the phone just like that offered that IF I WANTED, I could KEEP ANY SET from the order, return the rest (using the FREE SHIPPING label provided) and they would by all means refund not just the sets returned - but also the ORIGINAL SHIPPING COSTS!

do you get it??!! I DONT .. absolutely not!

IF .. IF LEGO is able to operate and run its business like this - we know the answer why everything is so expensive.. DAMNED.. how I wish them to get their butts kicked to realize this TOTAL IDIOTIC BEHAVIOR!

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By in United Kingdom,

^ I expect Lego's logistics mean that it's difficult to go after a single person's order in the midst of it being fulfilled. If everyone could keep editing their orders until everything was ready they wouldn't have time for the subsequent orders.

Are you suggesting good customer service has an impact on set prices? Because I'm pretty sure the impact is nearly negligible. Best hope that nice lady on the phone still has her job after the latest company movements.

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By in Czech Republic,

I work on daily basis in the logistics - that is why I commented on this. This is all about "the processes" and "IT set up".. there is absolutely no reason why you (as a customer) could not cancel your order (= not just part, but as a whole) BEFORE its dispatched. There could be presumably some deadlines set up such as not on the same day as the remaining sets arrived into the factory / dispatch center.. but sets that are 6 days ahead??? or TO DELIBERATELY SPLIT THE ORDER! ? (wrapping paper vs. sets).. does that make any sense from the "common sense" and "to ease the logistics process"? So you split ONE ORDER into TWO? + pay xtra costs for external Deutsche Post shipping?

NO, sorry, sir.. this is a blutantly ineffective and huge problem that could be VERY EASILY solved. And no one would get hurt.

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By in United Kingdom,

Huw, is it okay to be insulted in this topic? Being called an "idiot" by @Aanchir is unwarranted.

@ericjohn Yes, I did read the article - don't be so condescending. I don't need to explain myself to you.

@ebknotts Good for your child then. But these sets are hardly aspirational. At least Classic Lego didn't genderise play with girl or boy Lego themes...at least girls back then played with a better quality of you - sets with female Doctors or car drivers or workers...what does Friends really offer except looking remotely nice?

I thought this was a friendly discussion Huw, not a place to be lambasted - shouldn't the Mods keep a closer watch on this?

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By in United Kingdom,

just a quick one...

my kid and class was asked "who would like to see the LEGO Ninjago" movie as a treat? Rather alarmingly, only three kids expressed an interest in seeing it,

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By in United States,

@sf1378: Only the first paragraph of my post was directed at you specifically. I didn't call you an idiot, I called "everything would be better if LEGO did everything MY way!" comments in general idiotic. Perhaps this was a bit harsh, and I do need to practice avoiding ableist language, but that said, it doesn't take any real thought or consideration to just assume what's good for you is good for everybody. The LEGO community is way more diverse than that. Now, if you prefer to make comments like the kind I was talking about in my second paragraph that's your choice, but you shouldn't be surprised if a lot of people don't take them seriously, because it's an easy comment to make if you can't be bothered to open your mind and think about how maybe other people might have good reasons for liking different stuff than you.

Besides looking great, Friends and Elves are designed according to ways LEGO has found girls enjoy playing, many of which are things classic themes have routinely lacked. For example, a lot of classic themes feature a dearth of interior details to make them feel truly livable. Dolphin Cruiser and Sunshine Catamaran each have beds, a kitchenette, comfy seats, a toilet, a shower, and other "creature comforts", whereas LEGO City only recently started even including beds in their largest ships, and the ones they include tend to be institutional-looking slabs rather than anything that actually seems comfortable. The only LEGO boat or ship set to date that feels nearly as livable as the ones in LEGO Friends is this year's Destiny's Bounty. Likewise, Heartlake Hospital features way more playable details than any other LEGO hospital ever has. Rather than just being highly simplified versions of reality, Heartlake City (and similarly, Elvendale) are designed to feel like places kids might genuinely want to shrink down and inhabit.

The color palettes of classic themes tend to feature loud primary colors like red, yellow, and blue while avoiding floral colors like pinks, purples, or azures as if the designer thought using those colors would give them cooties. Classic themes like Town also tend to be severely lacking in animal life, something LEGO has only recently really started taking more seriously in their City sets. The figures in classic LEGO themes are blocky and lacking in lifelike details, and a lot of girls have never been able to identify with them to the extent that boys do. The nameless figures in themes like City rarely have any recognizable interests that kids can relate to, whereas Friends gives its characters diverse and relatable interests like science (Olivia), music (Andrea), art and design (Emma), planning and organizing (Stephanie), and animals and the outdoors (Mia).

Obviously, none of these are reasons YOU have to like LEGO Friends. But they're all parts of why it's been more successful getting girls into LEGO building than the classic themes ever were, and why even a lot of guys have found a lot to appreciate about its sets. I don't see how you think anything would be gained from eliminating them besides a shallow excuse for "gender neutrality" that really just means prioritizing what boys prefer whenever it doesn't match what girls prefer.

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By in United Kingdom,

^ Put simply, I agree and I find it a little paradoxical that the merits of themes such as Friends are needing to be clarified so many times to people when even this article's press release said that Friends was a top performer this year.

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By in Australia,

@Aanchir

So just because classic Lego themes were not extremely "girlified" they were bad? What about Paradisa then?

"Besides looking great, Friends and Elves are designed according to ways LEGO has found girls enjoy playing, many of which are things classic themes have routinely lacked"

Funny that, because lots of people bought the classic themes and enjoyed playing with them, and I see heaps of boys buying City sets, so Lego must have also designed those sets according to ways boys enjoy playing.

The classic themes were good for both genders (think of the classic townhouses!). If anything, the new themes such as Friends and Elves have only made gender stereotypes even more dominant.

Since you clearly failed to notice, lots of the old classic sets (especially Town) included both boys and girls playing together, unlike Friends. I know that City does not include this either, but due to the introduction of these themes solely focused on a female audience, the originally non gender specific themes (ie City/Town) have been forced to focus solely on a male audience.

And since you are so concerned with colors, there were songs written by girls in Australia who were sick of everything being pink, pink ,pink. You talk of realistic, detailed interiors, but the Friends line makes extremely unrealistic colored exteriors. When was the last time you saw a purple hospital? And pink life rings?! I am sure the majority of girls would want to play with a realistic colored building. You have also failed to notice that while Friends sets include detailed interiors, they lack the completion of walls on the side and never have a roof of any kind.

Finally, according to you, Friends has got more people into Lego then any of the classic themes. The reason Lego fans exist is because of the classic themes, it was the classic themes that made Lego a household name and the reason both young and old people of BOTH genders love Lego and buy the sets.

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By in United States,

@Brickchap: Seriously? No, that's not my point at all. Themes that are less girly are not inherently bad. But they are not inherently better than girlier themes, either. The fact that boys like them does not make them flawless or mean that girls have no reason to expect more than what they have to offer.

City/Town were geared towards the interests and play styles of a predominantly male audience long before themes like Friends came about. Even the figures themselves are more in line with boys' preferences than girls'. The idea that these classic themes were "good for anyone" ignores the reality that their audiences have ALWAYS been made up of far more boys than girls. That's the entire reason LEGO has been trying over and over since the 70s to create sets and themes specifically for girls — not because they want to pull them away from other themes, but because for the most part girls weren't enjoying those other themes to the extent that boys were in the first place! Friends is just the first time LEGO has actually found a solution that actually appeals to girls the way their other themes have always appealed to boys.

Paradisa was alright, but paled in comparison to Friends. The colors and subject matter were way more repetitive and stereotypical, the builds were generally simplistic, and it's easy to tell LEGO didn't have as much insight into what girls actually wanted from a building set as they did after all the research they did developing LEGO Friends.

Finally, I said Friends got more GIRLS into building than the classic themes, not PEOPLE. It's like you're trying to sound obtuse. Maybe work a bit harder on your reading comprehension.

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By in United Kingdom,

@sf1378 in United Kingdom, 09 Sep 2017 17:39
"@ebknotts Good for your child then. But these sets are hardly aspirational. At least Classic Lego didn't genderise play with girl or boy Lego themes...at least girls back then played with a better quality of you - sets with female Doctors or car drivers or workers...what does Friends really offer except looking remotely nice?"

My memory of girls theme back in the 70's was the Homemaker, not very aspirational - no doctors, car driver or workers there.

We have never pushed pick girly things on our daughter and bought her cars and things like that, allow her to get covered in mud and generally have as much of a childhood that is gender neutral. When she was 3 I took her to by a sand and water table and gave her the choice of colours red/blue or pink/purple and she freely choose the pink/purple. We in general let her choose the type of toys that she can have, the exception being anything that is too young for her.

We have bought city and creator themed Lego for my daughter but she does not play with these and they just sit in a box. Recently she has used the female vet from 1 set to play a doctor not a nurse as some of the figures were not well. This is considering that she see a male doctor and female nurse in the TV programmes that she watches and I am not even sure that she has seen a female doctor. Both my husband and I are from an engineering background (he mechanical engineering and I am civil engineering / Chemical engineering) and I was told in the 80's by a careers adviser to become a secretary. I had a friend who wanted to become a pilot but was discouraged from doing so as girls did not do these things. Any girls of my acquaintance have aspirations to become lawyers, doctors, accountants and such like but like girly things. That saying I know that a lot of people seem to think that girls should not be these and we have a long way to let girls and boys play with the toys that they want and do the jobs that they want to do. Children get their influences from all sort of places and not just from the toys that they play with and sometimes just need to be children. They just need toys that will spark their imagination and give enjoyment. If these are girly or boyish toys then it is up to their parents to make sure that they are exposed to other influences.

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