LEGO achieves strong growth in 2021
Posted by Huw,
LEGO has published its annual results this morning. The headlines are:
- Consumer sales grew 22 percent for the full year vs 2020.
- Revenue grew 27 percent to DKK 55.3 billion compared with 2020.
- Operating profit grew 32 percent to DKK 17.0 billion.
- Net profit was DKK 13.3 billion in 2021 against DKK 9.9 billion in 2020. Profit grew strongly while the Group continued strategic investments to meet long-term growth.
- Free cash flow was DKK 12.9 billion.
- Market share grew in the largest markets.
You can read the full press release after the break.
Billund, March 8th, 2022: The LEGO Group today reported earnings for the full year of 2021. Revenue for the year grew 27 percent versus 2020 to DKK 55.3 billion and consumer sales grew 22 percent over the same period, outpacing the toy industry and driving market share growth globally and in largest markets.
The LEGO Group CEO, Niels B. Christiansen said: “I am grateful for everything the LEGO Group was able to achieve in 2021. Our passionate and committed team of more than 24,000 colleagues showed tremendous dedication and resilience to keep the world playing. Meanwhile, our strong financial performance allows us to further accelerate strategic investments to help us reach more children in the long term.”
All market groups delivered double-digit consumer sales growth thanks to strong execution and the largest and most diverse portfolio ever that brought families together and appealed to builders of all ages and interests. Top-selling themes included LEGO City, LEGO Technic, LEGO Creator Expert, LEGO Harry Potter and LEGO Star Wars.
The 2021 portfolio was awarded seven ‘Toy of the Year Awards’ from The Toy Association which recognises the year’s top product launches. The recognition is a testament to the creativity and playfulness of the company’s designers and the endless possibilities of the LEGO System in Play.
Operating profit was at DKK 17.0 billion, an increase of 32 percent compared with 2020, despite ambitious strategic investments and increased freight and raw materials costs. Net profit was at DKK 13.3 billion compared with DKK 9.9 billion in 2020, while free cash flow was at DKK 12.9 billion.
The company has delivered strong financial results while also delivering strong non-financial results such as consumer satisfaction (NPS) and people engagement that are both at record high levels.
Strategic investments drive in-year and long-term growth
The LEGO Group will continue to accelerate its strategic investments in product innovation, retail channels, production capacity, digitalization, and sustainability to drive in-year and long-term growth.
Christiansen said: “In 2021 we saw the benefits of strategic investments made over the past three years to innovate our portfolio, expand and evolve our retail experiences and increase capacity within our global supply chain network. I am excited about our ability to continue to invest against these priorities due to our strong financial results. Combined, these investments will allow us to bring LEGO play to many more children around the world now and for generations to come.”
In 2022, the LEGO Group expects growth rates to normalize to long-term sustainable single-digit growth. This will be driven by a continued focus on product innovation and growth in established and newer markets.
Creating memorable retail experiences
The LEGO Group’s significant investments to expand, innovate and transform its digital retail channels and brick and mortar stores paid off in 2021.
Sales across its own and partners’ digital retail channels grew strong double digits, indicating the shift to online sales from 2020 continued.
Shoppers continue to seek meaningful and engaging brand experiences in physical stores. During the year, the company opened 165 new LEGO branded brick and mortar stores, with more than 90 in China. This brings the total number of stores globally to 832 as of December 31. 2021 also saw the introduction of a new retail store platform that is designed to create immersive, memorable brand experiences for shoppers. It will be introduced to more stores in 2022.
Expanding global capacity
The LEGO Group’s five factories in three continents positioned the company well to navigate through shifting demand in its largest markets.
In 2021, the LEGO Group announced its plans to further expand its network of factories with a new USD 1 billion factory in Vietnam. Located near Ho Chi Minh City, the site will be the company’s first operationally carbon neutral factory, constructed to support long term growth in the Asia-Pacific region.
Additionally, the company is expanding its capacity of existing manufacturing sites significantly over the next five years to meet immediate and longer-term demand in line with growth expectations.
Connecting with consumers through digital and physical play
The LEGO Group continued to provide playful digital experiences for builders, such as Digital Building Instructions which had 9.6 million downloads during the year and the LEGO Life app which has been downloaded by more than 33 million users since its launch in 2018.
To support the development of LEGO consumer experiences that blend digital and physical play, the LEGO Group significantly increased its digital capabilities recruiting colleagues to its Digital Hubs in Billund and Copenhagen in Denmark, London and Shanghai.
Building a sustainable future
In 2021, the LEGO Group successfully completed a trial to replace single-use plastic bags in boxes with sustainable packaging. The new packaging will be phased-in from mid-2022 putting the company on track to achieve its goal of having sustainable packaging by 2025. It also unveiled a prototype brick made from recycled plastic bottles and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets. The company was awarded an A rating for Climate by CDP in recognition of the introduction of a science based CO2 reduction target, supplier engagement and ramping up investments in renewable energy, which included increasing solar panel capacity at its factories by 98%.
Reaching more children
The LEGO Group believes that learning through play gives children the best opportunity to develop life-long skills that will help them achieve their potential. During 2021, the company reached more than 3.5 million children via donations and local community engagement activities. The LEGO Foundation, which owns 25 percent of the LEGO Group, also pledged DKK 2.8 billion in donations to programmes which give children and families, often those in need or facing crises, the chance to play and learn.
Christiansen said: “2022 marks the 90th anniversary of the LEGO Group. We are pleased that in this milestone year our strong financial foundations allow us to make such significant investments in building a business that will inspire and develop future builders for many generations to come.”
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57 comments on this article
Always great news for TLG with these results, and in turn, us fans.
Glad to see the paper bags finally on the way - maybe 2H sets by the looks of it.
It would be great to see how the "Adults only" sets contributed to this...
"To support the development of LEGO consumer experiences that blend digital and physical play, the LEGO Group significantly increased its digital capabilities recruiting colleagues to its Digital Hubs in Billund and Copenhagen in Denmark, London and Shanghai."
Wow, what a threat. But I guess it's cheaper for TLG to let kids build virtually than having to produce actual toys.
Let’s hope they don’t rest on their laurels too much.
Lego definitely benefitted from the pandemic in terms of people having more time indoors that couldn’t be spent socialising, and relatively protected incomes.
With disposable incomes likely to be falling sharply across the board, and some of the new fans able to return to previous leisure activities, I hope that Lego are prepared to absorb a drop in their own turnover without ramping up prices for the rest of us.
Press release jargon just makes me laugh. "Shoppers continue to seek meaningful and engaging brand experiences in physical stores." Really, that is what shoppers want? I generally just want to buy fun toys when I'm in a toy shop...
Big shoutout to all the Lego City and Star Wars fans paying twice the amount for sets than what they are worth! Really, it wouln't be possible without you guys. <3
I'm confused about which sets are considered Creator Expert and contributed to the top 5 list. Why still use the name officially as a theme, after removing it from the box, if LEGO emphasizes brand identity so much? If you look up the theme on the official website sets like the small CREATOR train and Vespa also fall under it. Makes little sense.
"and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets."
Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are. I haven't heard of any complaints or noticed anything different myself, so that's definitely a testament to their quality.
@BrickRandom said:
"Press release jargon just makes me laugh. "Shoppers continue to seek meaningful and engaging brand experiences in physical stores." Really, that is what shoppers want? I generally just want to buy fun toys when I'm in a toy shop..."
The trick is to actually have enough stock in the stores these days. There is never enough speed champions or technic formula 1 sets in stock, let alone all the big sets from every theme that have been impossible to get for ages.
I know i don't seek any engaging experiences at any store, ever.
If a 'meaningful and engaging experience' means being told everything that I am shopping for is out of stock, then I guess I am fulfilled!
Creator Expert was a bit of a surprise, although given the number of sets and the high costs of most of em, it does make sense, heh. Some interesting stats here.
So VIDIYO didn't kill the company. That's good.
It's wonderful that Lego is doing so well. It's a good company with a great product and its employees seem satisfied, too. That is all good news.
Now, perhaps, a celebratory spirit will overtake the company for a bit and someone with great power will wildly and impulsively shout "Let there be GOATS!" and it will happen in that beautiful moment of madness!
“So VIDIYO didn't kill the company. That's good.”
My 7yo is big into her Vidiyo stuff again. She keeps making little videos and is so happy with it. I don’t have the heart to tell her the line was canned.
As for other aspects of Lego and these results: 1) good to know the company is doing well; 2) I’m glad that there’s a roadmap for sustainability, and one that’s not too far out (even if it’s not that soon either as far as the bags go), and; 3) here’s hoping Lego might use a little of that a massive profit to improve its printing colour matching. That roof of the new Speed Champions Lambo is just awful.
Always great to hear good news!
With a €2.2 billion net profit in 2021, do you think they'll finally be able to afford colour consistency and proper printing? Great to see how well they're doing, and I hope that translates into even better production quality.
I didn’t think it was called Creator Expert anymore?
@MrBob said:
""and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets."
Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are. I haven't heard of any complaints or noticed anything different myself, so that's definitely a testament to their quality."
I think a lot of the flexible green plant parts are.
@sirventricle said:
"With a €2.2 billion net profit in 2021, do you think they'll finally be able to afford colour consistency and proper printing?"
Actually clear parts without scratches would be nice too.
@MrBob said:
""and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets."
Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are. I haven't heard of any complaints or noticed anything different myself, so that's definitely a testament to their quality."
You mustn't be reading the pages of Brickset on a regular basis or you purchase (and build) very little Lego sets in any given years. There are tons of complaints going on from brittle shattering Lego pieces (dark red and brown) to inconsistent colours (across the range) to non-transparent (or less transparent) trans-parts which may or may not fuse with adjacent parts. Those are the main problems touching directly to the plastic. There are a lot of other problems of logistics as well: late cancellation of products, promotion availability (timing and quantity), etc.
I am glad it is going well for Lego and as someone already mentioned, I hope they are ready for a drop of available income (inflation) and a return to previous leisure activities from a large swath of their new consumers. Lego is still a great toy (offering-wise) but it certainly is not what it once was (quality-wise).
The meaning of "meaningful brand experiences" would be: to leave as much cash at the store as possible? Meaningful would be: to help people in need, or to strive for some other higher purpose.
I know I do spend a lot on LEGO, but I don't feel that's "meaningful" to me. Why does TLG need to make such huge profits? I don't feel they really need it.
@MrBob said:
"Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are."
The plants.
@pawelg said:
" @MrBob said:
""and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets."
Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are. I haven't heard of any complaints or noticed anything different myself, so that's definitely a testament to their quality."
You will be able to tell when they start to degrade faster. "
No you won't. It's the same final chemical formula. The bio is because the origin is current plants, not long dead (oil) ones.
Surprising to not see LEGO Friends as a top selling theme this year compared to last … I’m assuming the adults theme is creator expert? Not sure…
@sirventricle said:
"With a €2.2 billion net profit in 2021, do you think they'll finally be able to afford colour consistency and proper printing? Great to see how well they're doing, and I hope that translates into even better production quality."
Don't get your hopes up.
If anything, these results prove that the majority of customers worldwide doesn't give a smeg about quality or value for money. If they did, TLG would be out of business.
No, it is exactly BECAUSE the LEGO echelons know that they can skimp on quality and still rake in obscene amounts of money that they have zero interest in getting better. All they need is to keep on conning their customer base into believing that they are getting their money's worth.
If Joe Average and little Timmy (or whatever equivalent exists in your country) knew that they could either get the same quality much cheaper or better quality for about the same price as LEGO's from alternative manufacturers, those sales figures would look VERY different. But since TLG has built up such an amazing brand loyalty thanks to the good products they offered in the past they can now get away with almost anything.
@BrickRandom said:
"Press release jargon just makes me laugh. "Shoppers continue to seek meaningful and engaging brand experiences in physical stores." Really, that is what shoppers want? I generally just want to buy fun toys when I'm in a toy shop..."
lol, true. The brand experience I want is to walk into a store and find the box on the shelf and maybe get a free gift.
I just wish Ninjago was in stock at my stores......
I'm not so happy about these figures, at least regarding the profit. Finally it is somehow against my wallet. And the fantastic HUF/EUR exchange rate does not help either.
Maybe with all the money they're making, they can take some risks and give some fresh, original IPs instead nothing but licensed themes. :)
"Lego acheives strong growth"
Lego: Amazing! Now lets make Star Wars and City sets three times what they should be worth!
Also, sad that Ninjago and Speed Champions aren't on the top 5. Two of the few themes that still have good prices + good number of parts + amazing designs. Definitely deserved the top 5 more than SW and City. Hope that this doesn't bring a risk to Ninjago's continuity...
Monkie Kid... if only Lego properly offered the theme to all markets instead of making something that seems like "80% to China / 15% to NA & EU / 5% to Asia and Oceania / 0% to South America"...
The most surprising part of this to me was that there were only 9.6 million digital instruction downloads. Compare this to the 33 million downloads of the Lego Life app. I'd have thought more people would want instructions. To me, this seems pretty clear that people still prefer paper when it's available. (I know I do.)
@sirventricle said:
"With a €2.2 billion net profit in 2021, do you think they'll finally be able to afford colour consistency and proper printing? Great to see how well they're doing, and I hope that translates into even better production quality."
Yes. That ^. Exactly.
And more printed parts instead of stickers in high-end sets.
And they could afford some more train sets, even if they make slightly less profit than the 17 police and fire cars they release every year.
There's only so many Ferrari's Kjeld can have in his garage...
@HOBBES said:
"You mustn't be reading the pages of Brickset on a regular basis or you purchase (and build) very little Lego sets in any given years. There are tons of complaints going on from brittle shattering Lego pieces (dark red and brown) to inconsistent colours (across the range) to non-transparent (or less transparent) trans-parts which may or may not fuse with adjacent parts. Those are the main problems touching directly to the plastic. There are a lot of other problems of logistics as well: late cancellation of products, promotion availability (timing and quantity), etc."
You must not be REALLY reading Brickset, because none of the issues you mention have anything to do with bio plastic parts....
Frankly I'm a bit outraged by those news. It seems that Lego did very well last year and that means there shouldn't be any need for price hike. And yet they did that. That seems like a surprising corporate greed to me and makes me wanna rethink how meaningful and engaging my money is to Lego company.
If with these prices Lego has a profit margin of just 24%, that makes me wonder how other (usually much cheaper) brands can even survive....
"Revenue grew 27 percent" - They raised their prices on some sets at the beginning of 2021 and they raised prices on other sets in the beginning of 2022 and upcoming 2022 sets. So for all their talk about being a concerned global source of positivity, they are adding to the inflation affecting every country.
As a parent, I think LEGO is the best toy for children's creativity and educational experience. I'm obviously rooting for The Lego Group to do well economically and grow the brand. The more fun and interesting sets they produce, I'm happy to buy. However, I'm taking this opportunity to call them out on price increases when the world needs economic relief.
@WizardOfOss said:
"If with these prices Lego has a profit margin of just 24%, that makes me wonder how other (usually much cheaper) brands can even survive...."
By investing nothing in R&D, retail space, IT staff, sustainability, customer service, etc, etc.
@Kalhiki said:
"Maybe with all the money they're making, they can take some risks and give some fresh, original IPs instead nothing but licensed themes. :)"
Like Vidiyo? Or Hidden Side? Or Monkie Kid?
LEGO Harry Potter is more popular than Star Wars? I mean, the sets are usually better but I wouldn’t have expected that. City being at the top isn’t as surprising but with how overpriced the sets are where I live and the fact that they’re shelf-warmers at my local Target, I thought Star Wars or Harry Potter would beat it.
Over a billion USD in profit and a lot of recent sets are grossly inflated in price, windscreens/windows still coming scuffed, printing and sticker colors still not matching, prints come more smudged, pieces of same color have clear color variance, over reliance on stickers in 18+ sets, and collectable minifigure plastic is cheaper quality. Premium price does not equal premium product anymore. "Only the best is good enough," or have they gotten so big they no longer care about basic quality control? And that's just quality control. Their website is still a trainwreck, gift with promo price thresholds have increased substantially, double VIP point days have been less promoted or removed entirely, bricks and pieces orders are taking over 2 months to deliver (with clear parts arriving damaged like the aforementioned issue), and monthly stock outs are still a constant issue.
I know it seems the internet is bitching 24/7 nowadays, but LEGO has gotten so very bad since 2020. Has the success gone to their heads? it just keeps bubbling inside me.
All that money and yet....... they still have one of the poorest performing websites I've ever seen for a company of this scale. Don't know about anyone else, but I find it massively frustrating (and almost unacceptable in this day & age) to navigate their site and have to wait up to 5 seconds for it to react whenever I click on something. I don't know any other website that behaves like this (so I know it's not a problem on my side). So much for their investing in digital capabilities, ha!
@gatorbug6 - I've had few, if ang of the quality issues you bemoan, and then rarely. As to stock issues, I think they're doing remarkably well give their rate of expansion of demand and the massive global supply issues affecting almost everything, everywhere. Somewhat a victim of their own success: probably 5+ years of growth in just 2, hence building a 6th manufacturing plant and expanding all thd existing ones.
@Captain_M : no website problems for me on Lego.com - not even on release days since they upgraded the system at the back end of last year.
I'm overjoyed to hear LEGO is doing well. Without LEGO my life really would be a lot less bright, and I want this company to be successful , and to keep innovating to keep things fresh. Especially happy to hear that Creator Expert (i.e. the AFOL line) is doing well, because that's what I like to buy. Bring me more of the complicated 5000+ pieces sets! (though I have no use for the LEGO Art picture type sets). And please kill Control+.
TLC also has great customer service good. I appreciate that very much.
Congrats TLC, keep doing great. Maybe in 2022 we can hope to have fewer "out of stock" items. I still haven't gotten my tow truck!
And no... despite buying quite a bit of LEGO sets in the past 2 years, I have not seen any serious issues with quality. My only complaint is that I don't like the black "Creator Expert" boxes. The older more colourful and brighter boxes were much nicer.
@tspike said:
"By investing nothing in R&D, retail space, IT staff, sustainability, customer service, etc, etc."
Absolutely true for some of those (remember Lepin....), but certainly not for all (think Cobi).
(to be fair, Cobi also isn't THAT much cheaper than Lego)
@Trigger_ said:
"LEGO Harry Potter is more popular than Star Wars? I mean, the sets are usually better but I wouldn’t have expected that. City being at the top isn’t as surprising but with how overpriced the sets are where I live and the fact that they’re shelf-warmers at my local Target, I thought Star Wars or Harry Potter would beat it."
The order in which they are presented by LEGO is not necessarily the real order. It could be, for example, that Creator Expert was really 5th, not 3rd. And even if the order is true, a ranking tells you little to nothing about relatives sales. Maybe the top selling line outperformed the next two combined. We don’t know. A ranking doesn’t tell you that.
"Top selling themes included..." This does not mean that the five themes named were the top five, only that they were among the top selling themes. They could have been sixteen through twenty of the top twenty themes. We just don't know how TLG defines "top selling." Quantity sold? Profit margin?
@DoonsterBuildsLego said:
" @gatorbug6 - I've had few, if ang of the quality issues you bemoan, and then rarely. As to stock issues, I think they're doing remarkably well give their rate of expansion of demand and the massive global supply issues affecting almost everything, everywhere. Somewhat a victim of their own success: probably 5+ years of growth in just 2, hence building a 6th manufacturing plant and expanding all thd existing ones.
Glad to hear it!
"
2022-2023 will be very different.
@R0Sch:
Creator has been messed up on their website since they split it into two categories. 18+ didn’t change anything there, other than the fact that no sets actually have Creator Expert branding. The mini Routemaster was listed under the same category, probably because they felt it was more important to ensure that every set listed as a 3-in-1 build actually had three buildable designs, vs making sure that every set listed as an Expert-level build would take more than five minutes to complete.
@MrBob:
Polyethylene, the soft plastic used to make lots of plants, minifig accessories, and other stuff that would be prone to breaking if it was made of more rigid ABS. There was a big “Plants from Plants” GWP some time ago to kick things off. I figured by now they’d be exclusively making plant-based PE.
PE is made from ethanol (aka ethyl alcohol), and both have very specific chemical formulas (as compared to ABS, where the three main components have specific chemical formulas, but can be combined in different ratios, or with other additives, to yield specific properties). Ethanol is ethanol is ethanol. But you can extract it from crude oil, or you can distill it from fermented plant matter. So, PE is PE is PE, and the only impact the source will have on the final product is by way of any impurities that slip through.
@RaiderOfTheLostBrick:
They’be been doing well enough for at least a decade that they can afford to have one critical flop each year and not ring the dinner bell for Mattel. If they reach a point where they only have one successful theme, that’s when you’ll know the end is nigh.
@HOBBES:
Things are at a temporary impasse on the brittle colors. There’s a contingent of AFOLs who keep demanding to know when they’re going to fix the problem. TLG announced at least a year ago that they had figured out the cause, implemented a solution, and then waited to make sure the fix worked before announcing anything, and there’s still a contingent of AFOLs who keep demanding to know when they’re going to fix it. If you don’t believe them when they say it’s fixed, why keep asking? You’re not going to believe a single word they say on the subject, so the only thing left to do is wait a few decades so you can see that sets produced after a certain period of time don’t have the same problem. But no fix is going to make all the existing brittle color parts stop being brittle. If they’re still in production, or will be in the future, you can ask for free replacements, but some printed parts will never be reproduced, and some molds will have been retired before they get used for every affected color again.
@AustinPowers:
Didn’t you say you swore off ranting?
@PDelahanty:
If you’ve got the paper version in the box, there’s less need to download instructions (unless two or more people want to build stuff from the same booklet). Most of those digital downloads are probably from Mario sets that have no paper instructions, or from older sets where the instructions can’t be found anymore. The few times I’ve downloaded instructions, it was usually to look up something in a set I don’t even own. One of the interesting things I learned is that the digital versions have significantly lower resolution than the printed versions.
@thor96:
Disney raises prices on theme park admission to curtail demand to manageable levels, not to increase profit margins. TLG saw an unmanageable spike in demand from pandemic shut-ins at a time when they had diverted some production capacity to make PPE for medical personnel, and after they’d had reduced or zero production coming out of at least one plant. MSRP also feeds the retailers, who have been paying higher wages with reduced staffing. Without seeing the books, we don’t know how much of any price hike stays in Billund.
@WizardOfOss:
Cheaper MSRP, cheaper materials, cheaper labor, often higher profit margin. Probably less total profit, since they don’t move as much product.
When will Lego pick up a globe (maybe even the Lego globe) and realise that China is not the only country in the world?
Also, why the obsession with digital? You dont NEED digital. Making gimmicky rip off Tik Tok stuff on their website isn't what gives them profit, it's making and selling PHYSICAL REAL bricks.
As a lego digital designer user personally I have never understood why Lego abandoned CAD programmes and has just bandwagoned onto Studio, although never releasing an official Lego CAD programme, especially one for kids.
As far as 'digital experiences' go, what makes the most sense is an official Lego CAD programme which allows people to continue the Lego System of Play and have endless possibilities for their imagination without being limited by financial constraints or physical space.
Every child has the ability to potentially build massive, complicated MOCs, like a modular building or UCS style space ship, but they are severely limited in what parts they have available.
Now I `100% agree that using what parts you have to make something is apart of the fun and the challenge, but at the same time it's also really cool being able to access parts you could never access in the real world due to only being in one set or really expensive etc. and being able to use those parts in a creative way, as well as having multiples of the piece you want (for example when I was little I wanted to build an airport terminal but never could because I barely had any 1x bricks and could barely make one wall)
LDD allowed me to avoid a Dark Ages and keep building even when I could not access my Lego collection.
I think it would be a real hit with kids if Lego came out with a PC CAD programme as well as a version for Ipad for example 'take your bricks on holidays' or something like that.
I also reckon that by having the option to 'move online' for building, as kids get older it would no longer be 'too childish' to have lego as I'm sure older kids would consider it cooler to design Lego ('Like a Real Lego Designer') on the computer and be designing things rather than just 'playing with Lego'. They could also tie such an initiative to STEM and encouraging kids and young adults into fields like graphic design, architecture etc. rather than just creating some app no one uses.
In fact, personally I think Lego's digital areas were a lot more interesting and fun in the past like when each Lego theme had it's own computer game. I had a lot of fun playing the Lego City Mining one, Alien Conquest, Agents etc. when I was younger.
@PurpleDave said:
"Cheaper MSRP, cheaper materials, cheaper labor, often higher profit margin. Probably less total profit, since they don’t move as much product."
Again, for some, absolutely. But again Cobi: considering their quality I highly doubt they use cheaper materials. They produce in the EU instead of all over thew world in mostly cheap labor countries. They also have lots of unique and often highly specialized parts, something I actually don't really like, but it is undeniably expensive to do. And they use way more prints (and less stickers) than Lego does. I can't find any financial results, but I doubt they will continuously lose money doing so....
The playing field is obviously it bit different for the Chinese brands, but the era that all of that was just cheap copy/paste rubbish is behind us. Well, it usually is still cheap...
One theory: considering the huge number of sets (and themes) Lego makes I sometimes get the impression they just throw everything at the wall and see what sticks. Resulting in lots of sets that make a lot of money, but also a bunch that won't do that well. As long as the former can compensate for the latter, that works. The other brands seem to stick more to things that have proven to work well for them, take less risks.
@Captain_M:
They said they were investing in the hardware for their website last summer, and it didn’t crash during Black Friday Preview, Black Friday weekend, Christmas, or New Years, and we’ve got May 4th coming up to give it one last stress test. That’s not insignificant. I can’t remember the last time I got queued when I loaded the site, but it was probably for May 4th, or when they launched Coin 5 shortly after.
@DoonsterBuildsLego:
The tricky one is the brittle colors. I got a few gallons of dark-red 1x2 plates from LUGBulk several years ago, and they were fine for a long time. Then a couple years ago I tried to build something with them, and about 10% of them would have one side shear off as soon as I pressed it down on another part. We did a show December 2021, and I was placing some reddish-brown quarter-round plates to create a firm base for a 10” Christmas tree, and the first one I tried to press down sprayed splinters of plastic across a few nearby baseplates, where I’d used it twice a year for several years with no issues.
If you have brittle parts, they won’t seem any different from regular parts. And then one day they’ll break. And the only way you’ll be able to tell the difference is time.
If the set is from the last year or two, they said they’ve had a fix in place for a while, so those should be fine. It’s older stuff where you won’t realize there’s a problem until maybe ten years down the road. We don’t know exactly when the cutoff is, but based on when they announced this, everything from 2021 on should be safe. I also have no idea when the problem started, but I’ve got all the Winter Village sets unopened (except the Toy Shop reissue), and Ewok Village, all of which have me nervous now.
@WizardOfOss:
We had a charter member of our LUG who loved and collected Tyco bricks, because at the time they were the only clone brand that had quality that was comparable to TLG’s. But the way you phrased your question, it sounded like you were asking more about brands like Best-Lock.
And then he obvious follow up question is why people buy those brands. Not every parent recognizes the difference in brands, or the difference in quality between brands. And not every parent who does can afford to pay for better quality.
My first experience with clone brands came as a young child. I had to go for a medical procedure, and my reward for enduring whatever it was ended up being that I got to pick a small toy from the gift shop. They had some sets that built animals that were comparable to the low end of Creator 3-in-1 sets, and I picked a zebra. I don’t remember if I noticed that it was a different brand before making my selection, but I did notice that the plates were unusually thick (about 1/2 brick height), and I definitely noticed when the parts that had notches for the red pins that held the hips together started breaking at the notches within a month or two. By then, it would have cost more than the purchase price to drive back and return it, and the gift shop probably would have eaten the cost rather than filing a claim with the manufacturer anyways. If they’d carried any actual LEGO sets, especially ones with minifigs, I probably would have picked even a Town set over the zebra, but by being the only option for a semi-captive customer base, they sell sets and make money.
@PurpleDave , well, this might be going a bit off-topic, but I think there's two distinct opportunities for those other brands:
1) indeed the cheap alternative, often (but certainly not always) lacking in quality. I doubt many parents wouldn't buy those unknowingly, after all, who doesn't know Lego? And you won't find the real copy/paste brands in stores in most countries, so the difference is usually pretty obvious. I personally don't care much for those, but it's not hard to see why there's a market for those: Lego often is just pretty darn expensive, and the overall quality doesn't always match that price.
2) by either making things Lego won't, or improving on things where Lego dropped the ball. Think of Cobi, Bluebrixx, Mega, but also more and more Chinese brands. Quality here is more important than bottom price. A good product at a decent price. Those to me are the interesting ones, and there seems to be an increasing market for those.
@HOBBES said:
" @MrBob said:
""and continued to expand its range of elements made from bio-PE, which are included in nearly half of all LEGO sets."
Wait, so then we're ALREADY getting at least some bio-plastic parts in half of all new sets. I'd be really curious to know which parts these are. I haven't heard of any complaints or noticed anything different myself, so that's definitely a testament to their quality."
You mustn't be reading the pages of Brickset on a regular basis or you purchase (and build) very little Lego sets in any given years. There are tons of complaints going on from brittle shattering Lego pieces (dark red and brown) to inconsistent colours (across the range) to non-transparent (or less transparent) trans-parts which may or may not fuse with adjacent parts. Those are the main problems touching directly to the plastic. There are a lot of other problems of logistics as well: late cancellation of products, promotion availability (timing and quantity), etc.
I am glad it is going well for Lego and as someone already mentioned, I hope they are ready for a drop of available income (inflation) and a return to previous leisure activities from a large swath of their new consumers. Lego is still a great toy (offering-wise) but it certainly is not what it once was (quality-wise).
"
Those problems are in ABS and mABS parts, they have nothing to do with bio-PE. Bio-PE is used for flexible plant parts.
@WizardOfOss said:
"If with these prices TLG has a profit margin of just 24%, that makes me wonder how other (usually much cheaper) brands can even survive...."
"Just 24%"?? That is an extremely high margin for a company that mass produces stuff. 5-10% would be normal, depending on the business one is in. Like supermarkets have a lower margin, since it's high volume, that you're pretty sure to sell quickly. If the risk is higher, the margin should go up, and niche markets usually have a higher margin.
I would say that LEGO is a strong brand, that should be doing well in the years to come. Although I think that at some point the AFOL display pieces will become less of a fashion. So then it's back to good old creativity for AFOL's and sets for children.
Interesting mention on 'positive impact on the planet', even though Technic control+ and powered up City Trains are the main reason why me and the kids have mountains of used batteries, whereas all the kids non-Lego outdoor RC cars and micro-copters use USB rechargable lithium batteries, so cannot be that expensive to switch over?
Well the revenue from me definitely contributed a lot.