LEGO's greatest risks in the future

[MAB]

One more question 'for the gut': who thinks LEGO will still be produced and actively played with by Children in 20 years time? (When your kids start having kids of their own)

Yes.

I wonder if my father asked the same (I was a 70s-80s kid). When I was a kid, home computers were just coming in, possibly dramatically changing what kids played with. 30-40 years on, kids still play with plastic.

People naturally want to create, whether engineering or art or both. Kids can do lots of lovely pictures on a PC, yet the ones that mean something or are worth keeping are usually the ones drawn with pencil and paper that they can put on the fridge. People can design huge minecraft cities or something in LDD, but an actual creation nearly always looks better than something virtual.

[Wodanis]

No-one seems to be picking up on my 3d printing argument. Innovation is not only products, it can also come from new distribution forms. I think 3d printing will one day replace the need to buy actual sets in shops. But it will take a long time before quality gets even close to the manufactured quality of LEGO. Maybe 2 decades? You could say the actual process of manufacturing will add no more value. That day WILL come, and then LEGO needs to become an IP company for designs of elements and sets. But others can do that too. And they can be digitally copied/pirated. How is LEGO gonna make their money in 2 decades time?

Or will they blend (nano) technology into each brick, creating SMART BRICKS. But then much more subtle (less noticeable to the naked eye) than the current POWER FUNCTIONS. And also, built into every element they have. I am talking again may a decade or 2 down the line.

TLG is looking into 3D printing but the technology is still in its infancy. Consider that Lego is a mass producer of high quality bricks. Even if a person has a 3D printer they would still pay licensing/user fees for the design, material to make the item and (not to mention quality control) require a huge amount of bricks in order to play and build with. Consider the effort to make such a thing I would sooner think it easier for a parent to simply purchase a set. However 3D printing would have immense uses in the design process for lego. Designers could conceptualize a piece and then turn it into reality in order to test it. I understand about creative disruption and the technology has the potential to do it, however the potential for abuse also exists. How would anyone police the knock offs?

As for the nano bricks, it is an interesting idea but I doubt it will be practical even in 20 years time. The technology is more science fiction than fact right now. If any industry would make use of such tech it would the medical industry first, then filter out from there.

[Faefrost]

I totally disagree with a couple points above.

The quality of clone bricks is no where near the quality of LEGO. They are increasingly easy to pick out of bulk lots I get by feel, color, and general appearance. And they do not go together well at all. And talk about over specialization. Does Mega Blok even have non licensed lines? The only thing I see on the shelf is Call of Duty.

Actually MB is probably the biggest long term threat to Lego in the North American market at least. They actually have a very good design team, but have long been hampered by materials, quality and distribution issues. But their sale to Mattel solves much of that. It gives the Mattels awesome sales and logistics chain. It gives them actual product managers in stores supporting the product the way TLG does. Couple this with the 2014-15 change over to mostly using ABS instead of their heavy use of styrene and they are well positioned going forward. They have been eroding Lego on the edges. The Halo and CoD lines are targeted more at the "post Lego age" kids opening up a new niche. While at the same time their often not really noticed non licensed stuff is growing. Particularly into Duplo's territory. 2015 should see them making a real run at Friends with Monster High sets. They will not replace Lego any time soon, but they are building a solid base that they had previously lacked.

Hasbro Kre-O seems to be going in the opposite direction and is steadily vanishing from store shelves. Ionix not far behind it.

The real threat to both Lego and MB is the unrestricted IP theft coming out of China and flooding the world market with cheap knock off crap.

[LEGO Historian]

There's less emphasis on people making their own stuff and more emphasis on completing collections and buying novelty toys to set on bookshelves.

Also, TLG has a tendency to make some really stupid, bizarre decisions, like changing the green baseplates to bright green. While I disagree with the 60% price increase, I understand that it won't affect their profits. But changing the color was an incredibly idiotic move. There's no benefit whatsoever to changing it. It only frustrates the people who have already have a collection of the old ones. The very moment some clone brand starts making decent baseplates, even the purists will stop buying them from TLG.

Wow... you hit some really good points there Jodawill....

I don't mind people buying Minifigs to play with or put into panorama LEGO scenes.... but this obsession with the CMFs and other items is very reminiscent of the Baseball Card craze of the 1980s and we know where that ended up... same place as the "valuable" Princess Diana Beanie Babies.... They've got factories in China cranking these out by the millions in 3 shifts a day.... Whenever I hear "collectible" I want to run the other way....

And your points about the baseplates is spot on!! Why does TLG keep messing with them? Not just the baseplates, but the road plates as well.

End of rant....

[TheLegGodt]

TLG is looking into 3D printing but the technology is still in its infancy. Consider that Lego is a mass producer of high quality bricks. Even if a person has a 3D printer they would still pay licensing/user fees for the design, material to make the item and (not to mention quality control) require a huge amount of bricks in order to play and build with. Consider the effort to make such a thing I would sooner think it easier for a parent to simply purchase a set. However 3D printing would have immense uses in the design process for lego. Designers could conceptualize a piece and then turn it into reality in order to test it. I understand about creative disruption and the technology has the potential to do it, however the potential for abuse also exists. How would anyone police the knock offs?

As for the nano bricks, it is an interesting idea but I doubt it will be practical even in 20 years time. The technology is more science fiction than fact right now. If any industry would make use of such tech it would the medical industry first, then filter out from there.

I tend to agree, but again many a time predictions about the future are very often completely off the mark - either way. We shall have to wait and see. Fact is LEGO's basic product has survived (and thrived!) for roughly 60 years so far, so it is very conceivable it will for the next 60 as well. That will last me my life time, so in essence LEGO will last an eternity as far as I am concerned.

[Saberwing40k]

I don't think you can underestimate price, when my niece has a birthday my sister sends me a list of what she wants and unlike us not everything on it is Lego my family get her things that they think are worth the price or they find on offer. My nephew loves minecraft and Lego but on seeing the new sets spent his birthday money on other toys as he wouldn't get a lot with the money he had.

I think a massive problem with the world, that may threaten Lego, is this. For a while, a lot of companies have been pushing the idea that stuff should be extremely cheap, and people don't really care about quality either. Also, with the rise of social media and all that megablocks, and the idea that it is okay to give toddlers an ipad, is why they are not into Lego anymore, that and the whole decline overall in intelligence in that demographic, due to the social media use from the young age trend, is the greatest threat to toy companies in general, not just Lego. In the Transformers line, they have dramatically simplified things, because kids apparently don't care anymore. I fear that one day Transformers will only transform in the TV shows about them, and the actual figures will be little more than things that can be scanned to unlock stuff in an app. Lego is trying to ride this trend, which goes against everything they stand for, with the Fusion stuff, which I cannot say a single positive thing about. I mean, whatever happened to the idea that it was a different toy every day? I fear that Lego will disappear in the next 15 to 20 years, because kids will stop playing with it, and adult fans simply aren't enough to keep it going, and there will be fewer of those to, because people don't get into it as kids. Another possible threat would be China, given their flippant attitude towards IP and worker safety.

But, I could be wrong. Maybe this shallow social media trend will collapse, and maybe China will move up as a country, and stop being a source of cheap crap. Maybe it could become cool to make things again, instead of about how many followers on instagram you have. And, I think we adult fans could play a part. If you have kids, introduce them, and get them hooked. Then, our beloved Lego will be much better off.

[legoman19892]

I think a massive problem with the world, that may threaten Lego, is this. For a while, a lot of companies have been pushing the idea that stuff should be extremely cheap, and people don't really care about quality either. Also, with the rise of social media and all that megablocks, and the idea that it is okay to give toddlers an ipad, is why they are not into Lego anymore, that and the whole decline overall in intelligence in that demographic, due to the social media use from the young age trend, is the greatest threat to toy companies in general, not just Lego. In the Transformers line, they have dramatically simplified things, because kids apparently don't care anymore. I fear that one day Transformers will only transform in the TV shows about them, and the actual figures will be little more than things that can be scanned to unlock stuff in an app. Lego is trying to ride this trend, which goes against everything they stand for, with the Fusion stuff, which I cannot say a single positive thing about. I mean, whatever happened to the idea that it was a different toy every day? I fear that Lego will disappear in the next 15 to 20 years, because kids will stop playing with it, and adult fans simply aren't enough to keep it going, and there will be fewer of those to, because people don't get into it as kids. Another possible threat would be China, given their flippant attitude towards IP and worker safety.

But, I could be wrong. Maybe this shallow social media trend will collapse, and maybe China will move up as a country, and stop being a source of cheap crap. Maybe it could become cool to make things again, instead of about how many followers on instagram you have. And, I think we adult fans could play a part. If you have kids, introduce them, and get them hooked. Then, our beloved Lego will be much better off.

Nintendo started out as a playing card company, look where they are now. LEGO used to be a wood toy manufacturer and I'm no sure how well the dicast cars sold, but those look pretty cool. I would rather have LEGO survive as a company than to fade out.

[TheLegGodt]

Nintendo started out as a playing card company, look where they are now. LEGO used to be a wood toy manufacturer and I'm no sure how well the dicast cars sold, but those look pretty cool. I would rather have LEGO survive as a company than to fade out.

Not for me. LEGO is brick building and nothing else. I would rather that in 20 or 30 years time they are some small, obscure company catering to the needs of a niche group of loyal fans than give up on their roots (which for me is the brick).

[MAB]

Actually MB is probably the biggest long term threat to Lego in the North American market at least. They actually have a very good design team, but have long been hampered by materials, quality and distribution issues. But their sale to Mattel solves much of that. It gives the Mattels awesome sales and logistics chain. It gives them actual product managers in stores supporting the product the way TLG does. Couple this with the 2014-15 change over to mostly using ABS instead of their heavy use of styrene and they are well positioned going forward. They have been eroding Lego on the edges.

MB have also just announced they are picking up the TMNT license, so will be making in-roads into what has been lego's territory again. If lego get seen as a company that makes not great sets or expensive series where you have to buy many sets or them all to get the main characters, then MB gets the license and put many key characters into cheaper sets, then this could also harm lego longer term. Why buy lego, when you can wait for MB to get the license when lego are done producing their expensive versions. It's probably not valid for short term popular themes that will gradually die as their popularity wanes (eg Frozen).

[BirdOPrey5]

The biggest threat to LEGO is the fact plastic requires oil to be made. Oil is low right now due to Saudi Arabia flooding the market to knock out North American competition- but prices will soon be higher than they ever were- and a hundred years from today oil might be a hundred times more expensive. LEGO needs to be working on a petroleum free material that is as good as the plastic they use today.

[MAB]

The biggest threat to LEGO is the fact plastic requires oil to be made. Oil is low right now due to Saudi Arabia flooding the market to knock out North American competition- but prices will soon be higher than they ever were- and a hundred years from today oil might be a hundred times more expensive. LEGO needs to be working on a petroleum free material that is as good as the plastic they use today.

They already are.

[Breakdown]

One of the biggest threats has to be Tyco, they are now owned by Mattel so you have:

Hot Wheels + Super Blocks and Barbie + Super Blocks for the little ladies.

I would think that this is a much more formidable threat than Kreo-Transformers.

[SweetiePie88]

As far as the TMNT and MB thing goes, SIgn me up!!! If what they make is half as good as what they did to the SB line, my wallet will be open for business.

As far as the CMF's, i used to be mega addicted to those things until i realized that i was buying buying buying and not doing anything with the things besides mostly display! So i got rid of most of the excess in a trade with a guy and i still have a bunch left over. *adds memo to self on to-do list*

[alois]

I think there could arise a problem no one yet mentioned. Lego today is mostly owned by one man, Kjeld Kirk Kristiansen, and his offspring. He has led Lego for many decades, was responsible for its succes since the late seventies and couldn't be more involved. But what if he dies? His children will own Lego, but have never had a leading position within the firm (correct me if I'm wrong). Are they as involved as he was? Or will they just go for the money? Lego wouldn't be the first company to go under due to troubles in a next generation that has only inherited but not built the company. I don't say this is likely to happen (KKK will have seen to that), but it certainly is a risk.

[AmperZand]

TLG is looking into 3D printing but the technology is still in its infancy. Consider that Lego is a mass producer of high quality bricks. Even if a person has a 3D printer they would still pay licensing/user fees for the design, material to make the item and (not to mention quality control) require a huge amount of bricks in order to play and build with. Consider the effort to make such a thing I would sooner think it easier for a parent to simply purchase a set.

I agree in the near to mid-term, but taking a longer view, 3D printing has the potential to be a massively disruptive game changer. When high quality 3D printing can be done inexpensively at home or at least on demand by small, local companies, TLG may reduce its production and distribution of finished goods and instead sell designs and limited use IP rights. It's analogous to the trajectory book publishing is already taking: you can buy the book or you can buy the PDF and print it yourself. In future, I foresee consumers buying LEGO sets or buying the CAD file with a licence and producing sets themselves. The main problem for TLG with the latter is that every Tom, Dick and Harry with CAD skills is a potential competitor. Imagine a world with not a few construction toy brands (LEGO, MB etc), but thousands.

[Artanis I]

I agree in the near to mid-term, but taking a longer view, 3D printing has the potential to be a massively disruptive game changer. When high quality 3D printing can be done inexpensively at home or at least on demand by small, local companies, TLG may reduce its production and distribution of finished goods and instead sell designs and limited use IP rights. It's analogous to the trajectory book publishing is already taking: you can buy the book or you can buy the PDF and print it yourself. In future, I foresee consumers buying LEGO sets or buying the CAD file with a licence and producing sets themselves. The main problem for TLG with the latter is that every Tom, Dick and Harry with CAD skills is a potential competitor. Imagine a world with not a few construction toy brands (LEGO, MB etc), but thousands.

Plus when you have LDD etc, you can just make whatever piece in whatever colour in whatever quantity, all you need is someone to leak a file or come up with their own LDD file and TLG gets no money.

But what about prints? and complex moving parts like minifigs etc? It would be a very long time before that kind of thing can be satisfactorily 3D printed. I think TLG or the world may see bigger changes before people can make their own decent Lego. But I don't know the future...

[kibosh]

I think there could arise a problem no one yet mentioned. Lego today is mostly owned by one man, Kjeld Kirk Kristiansen, and his offspring. He has led Lego for many decades, was responsible for its succes since the late seventies and couldn't be more involved. But what if he dies? His children will own Lego, but have never had a leading position within the firm (correct me if I'm wrong). Are they as involved as he was? Or will they just go for the money? Lego wouldn't be the first company to go under due to troubles in a next generation that has only inherited but not built the company. I don't say this is likely to happen (KKK will have seen to that), but it certainly is a risk.

This really is a great point. Are the children involved in the company at all? Do they have ownership stakes? If they fight over the company, or don't care about it, they could easily tear it apart. LEGO needs someone a the helm that loves the company and cherishes what it is and what it means. If it becomes just another business, it will suffer like all businesses do.

[hiroki]

I agree with the "collectibles" part of LEGO being a risk. I'm still upset that I cannot complete the CMS because of Mr. Gold, or when they release those SDCC exclusives. Haven't they realized that they have such a huge fan base now that producing just a few thousand of those exclusives caters to such a select few?

[TheLegGodt]

This really is a great point. Are the children involved in the company at all? Do they have ownership stakes? If they fight over the company, or don't care about it, they could easily tear it apart. LEGO needs someone a the helm that loves the company and cherishes what it is and what it means. If it becomes just another business, it will suffer like all businesses do.

You're parially right. A business man will rationally look at what creates value and that is necessary if TLG is to make a healthy profit and continue to survive. But (supervisoy) board members with off-spring family members (among others) can keep an eye out for the soul and cores values of the company.

[Robert8]

3D printing is LEGO's biggest threat in the horizon..... for sure!

I don't how they will handle that

[LegoGunInstructions]

I think that the main people that will buy lego in the future are people who lived right now or before because the newer generations don't really like toys anymore - the new trend is technology. I also think the current fans of lego cold eventually get bored and these 2 factors mean that lego could see a serious reduction in SALES. Movies of the 21st century lack original plots which means that the involvement in movies is not even a great long-term investment.

[SMC]

I think some people have taken some things that might be a little true too far.

3D printing, Lego don't use it for a reason so it still has some way to go, even when it gets there it will take a long time for the cost of one that is good enough to come down so that you and me can buy them and even then the idea that a lot of people might never happen. You need a lot of thing even to make a small Lego set. A lot of different colors and design, printing instructions and so on.

Kids don't play with toy. Well yes they do.

I still think that Lego biggest problem is that they might have reached saturation point, if everyone has Lego then its harder and harder to get more sales. Prices going up could put people off as could quality.

[Savage Oppress]

their biggest risk is the price of sets. The prices for the sets have been slowly increasing every year.

[Iria]

their biggest risk is the price of sets. The prices for the sets have been slowly increasing every year.

But so has inflation and average wages.

[SMC]

^ Well inflation here in the UK is flat and prices have been going up a lot faster that inflation for years now and I agree price is Lego big danger in the next few years.