End of Lego

[ShaydDeGrai]

The company will have learn't from previous mistakes that nearly saw them go out of business, I can't see them making similar mistakes in the future.

John Hammond: Don't worry, I'm not making the same mistakes again.

Dr. Ian Malcolm: No, you're making all new ones.

- The Lost World: Jurassic Park

[MAB]

I imagine their influence will decline, if not die out completely. Kids will hopefully always enjoy building stuff out of bricks. However, as more and more kids do less real play and move into online / computer games and do it at a younger age, then the amount of time spent playing with lego will decline.

Lego will presumably change in future too. It wouldn't surprise me if they started making, for example, bricks that can be connected at angles other than 90 and 180 degrees. They are doing it for some plates now, so why not bricks, so you can have a smooth corner when building a hexagonal wall / tower. Some people will love the realism, others will hate it as there are old methods of doing the same with basic bricks.

It will also be interesting if they decide to give up on the old minifig style at some stage, going for more detailed figures at some stage in the future (again a start has been made in Friends).

[splatman]

However, as more and more kids do less real play and move into online / computer games and do it at a younger age, then the amount of time spent playing with lego will decline.

Not sure if that would play out. TLG has been making and selling video games since the late 90's, yet that did not stop them from taking the #1 spot. Lego video games, if anything, have encouraged kids to get their hands on real bricks. There were times I wish TLG put out roller coaster sets after playing Roller Coaster Tycoon. I have thought of making (not out of Lego) a real (not virtual) version of the online game Colourshift (lots of RGB Leds will be needed) and Tetris (Making rows disappear would be the tricky part). I once, in '86 or so, tried Lego-building the namesake spaceship from the Atari game Defender. Don't remember why that did not work out. The point, if you have not got yet, is I never really liked certain things to exist only in the virtual world.

If TLG ever does go belly-up, third parties, such as ME Models, would likely step up to the plate (or brick) and pick up where TLG leaves off.

[MocclyTeam]

Lego will end only when this world will reach end. :D

Edited November 3, 2015 by MocclyTeam

[HawkLord]

TLG will never truly die out. Even if the business starts to tank, I'm sure there are other companies willing to pick up the licenses and whanot - like MegaBloks, etc. If anything, I could see Lego moving or scaling back with less licensed themes to avoid IP costs if things got too tight.

[AAG Spitta - LEGO Channel]

LEGO must not and WILL NOT EVER END!!!

We all LEGO

[Brickmaster]

I've actually been extremely impressed with Lego's business management.

They are the best and most popular toy company in the world. They have extremely high quality, wide spanning audiences, backwards compatability of nearly a century, and they've even shown resilience in learning from their 90's mistakes.

Their product appeals to model builders, collectors, architects, engineers, artists... and not to mention kids! Truly an amazing hobby. It's even educational - teaching manual dexterity, how to follow instructions, and engineering basics. They even have very successful video games and kids shows! Whatever they do, they seem to do well (customer service too!).

I'd actually argue it's never been a better time to be a fan of Lego - just look at some of the beautiful, well-engineered sets they're coming out with. Lego has a way of appealing to every niche.

Edited November 4, 2015 by Brickmaster

[IvanTheBuilder]

This is a topic we all thought about one time in our Lego lives. How long does this Apple of toys have left. Also how will the prices of remaining sets go. Will a 20€ set turn into a 200€ set. Share your thoughts and let's get to a result (now i know none of us can say exact but isn't it fun trying to find out).

Edited August 24, 2016 by IvanTheBuilder

[Blondie-Wan]

I expect LEGO to outlast me.

[jonwil]

LEGO is the biggest toy company in the world and close to the most popular toy company in history. They sell products at price points ranging from $5 to $500. Generations of kids have grown up playing with the little plastic bricks.

And unlike Apple, a LEGO brick from 2016 is still compatible with a LEGO brick from 1966 and both will likely still be compatible with a LEGO brick from 2066.

I dont see the LEGO brick and the LEGO company going away anytime soon.

I own LEGO dating back to the 80s or even earlier and with the exception of parts that have been damaged to the point of being unusable (including some electrical cables where the insulation on the wires has perished) and my yellow RCX brick (which I cant get working with modern Windows versions), all of the bricks in my collection are just as uable now as the day they were made.

Edited August 24, 2016 by jonwil

[IvanTheBuilder]

LEGO is the biggest toy company in the world and close to the most popular toy company in history. They sell products at price points ranging from $5 to $500. Generations of kids have grown up playing with the little plastic bricks.

And unlike Apple, a LEGO brick from 2016 is still compatible with a LEGO brick from 1966 and both will likely still be compatible with a LEGO brick from 2066.

I dont see the LEGO brick and the LEGO company going away anytime soon.

I own LEGO dating back to the 80s or even earlier and with the exception of parts that have been damaged to the point of being unusable (including some electrical cables where the insulation on the wires has perished) and my yellow RCX brick (which I cant get working with modern Windows versions), all of the bricks in my collection are just as uable now as the day they were made.

I know LEGO will outlast me and i hope my kids but honestly i think around 60 years. They will as everyone *caugh* treyarch *caugh* infinity Word *caugh* run out of ideas....

[dr_spock]

LEGO is a company. As a type of legal entitiy it can last forever in one form or another. Being in the toy market means they have potential new customers being born every day. There'll always be someone who hasn't had a fire station before and asks Santa for one. I think as a private company, they may have better opportunity to focus on longer term results than a public company like Apple which is under constant quarterly earning pressures.

You could see 20 euro cost 200 euro. Your country could have hyperinflation.

[xboxtravis7992]

I would like to think it will outlast us, but the world is volatile. Business missteps like the early 2000's could happen again leading to the collapse of Lego. Or maybe a war could start which affects Lego's profits and ability to operate. But like many here I hope to still see Lego in 2070 and beyond.

[IvanTheBuilder]

You got me wrong Apple as a mayor company...... Get it Apple of toys...the mayor seller

[1980-Something-Space-Guy]

Hmmm, pretty sure we've already had a thread about this...

[HawkLord]

The saving grace of Lego in the late '90s era of uncertainty was the licensed product. Given that Lego can tap that well indefinitely since Star Wars and Marvel will be churning out movies every year until forever, I don't see Lego ever ending at this point. The Disney partnership is too strong and there is no real competition, since all major licenses are already taken by Lego.

As for pricing, Lego has always been good with gateway level prices. They know they can't rope in kids with $50 sets, so there will always be impulse level purchases available. Pricing will be what the market will bare and is really fine for now - even with the increased prices that experienced Lego fans are seeing.

Edited August 24, 2016 by HawkLord

[Robert8]

The biggest menace in LEGO's future is 3D printing

If they can survive that, then LEGO will be around for a loooooong time

[Aanchir]

The saving grace of Lego in the late '90s era of uncertainty was the licensed product. Given that Lego can tap that well indefinitely since Star Wars and Marvel will be churning out movies every year until forever, I don't see Lego ever ending at this point. The Disney partnership is too strong and there is no real competition, since all major licenses are already taken by Lego.

Err… I wouldn't say that. The licensed sets helped compensate for the larger failings in the company's business and build confidence in LEGO both internally and externally, but I wouldn't call them their saving grace, especially since that confidence led them down a road of reckless and costly innovations which nearly made them go bankrupt in 2003. "By late 2003, the LEGO Group's leaders finally began to concede that the glowing success of LEGO Star Wars, as one executive put it, was ultimately a 'thick, fat layer of cosmetics' hiding the raw blemishes of a sickly core business." (Brick by Brick, p90) According to the CEO Jorgen Vig Knudstorp, who was responsible for getting the company back on track beginning in 2004, "the toy that saved LEGO" was not LEGO Star Wars but rather LEGO Bionicle. "In 2003—the year the rest of LEGO came crashing down—Bionicle's soaring sales accounted for approximately 25 percent of the company's total revenue and more than 100 percent of its profit (as the rest of the company was tumbling to a net loss), making it a financial anchor in turbulent times." (Brick by Brick, p155)

While Bionicle itself is no longer the fixture in the LEGO Group's portfolio that it was back then, its development has been used as a road map for strategic innovation in the development of most subsequent LEGO themes, including modern-day mega-hits like LEGO Friends and LEGO Ninjago. Today, licensed themes are certainly still a big deal for the LEGO Group, but the company no longer relies on them the way they did in the years leading up to 2003. According to Jorgen Vig Knudstorp in an interview from earlier this year: "Licensing partners are a huge opportunity for us but today they are about a third of our portfolio and that has been the case for more than 10 years now, so they are an important, let's say spice, an interesting way of developing our portfolio, providing some novelty. But among our top five selling themes there's only one licensed theme and that's Star Wars which has been with us since 1999."

As for the future of LEGO, I see no reason to worry about that at present — both the company's value and their profits are sky-high, and they seem to have learned from the mistakes of the late 90s and early naughts, so if they do decline it won't be due to "history repeating itself" in that sense. Any factors that might potentially lead to a decline are not yet apparent, since even the risks the LEGO Group does take presently are a lot more calculated than the huge risks they took around the turn of the millennium. I don't see 3D printing being any more of a threat to LEGO than home paper-and-ink printers were to book publishers, particularly since the LEGO Group will be just as equipped to take advantage of improving 3D printing technologies as their competitors or the general public. Economies of scale dictate that if the time ever comes that individuals can 3D print their own bricks at the same quality as LEGO, The LEGO Group will also be able to use the same technology at a lower materials and operations cost per brick, simply by being able to buy their materials at a bulk rate and pool the other costs associated with their production line.

Will sticker prices on sets continue to rise? Oh, yes, almost inevitably. Inflation alone practically guarantees that. However, the rise of sticker prices on LEGO sets hardly seems as out of control as some people seem to believe. Case in point, 7190 Millennium Falcon from the year 2000 cost $100 USD new, which is about $140 USD in 2015 dollars. 75105 Millennium Falcon from last year costs $150 USD, so the "real" price has risen by just $10 USD. But the piece count of the new Millennium Falcon is double that of the original, the weight is 20% higher, and it even has more minifigures. Euro prices on older sets are hard to come by, but for the past five years (comparing 7965 with 75105 as a point of reference), Euro prices for LEGO in most countries seem to have remained fairly stable. If the price of a 20 Euro set ever rises to 200 Euros, it will probably have more to do with changes in the local value of the Euro than changes in the value of LEGO.

Edited August 24, 2016 by Aanchir

[AFOLguy1970]

It is very popular among several generations, so I think Lego has staying power. It can be used as a toy, or even as a medium for constructing a model of something. It has even been used in the corporate setting. I think it will be around for a long time. Licenses will come and go, however I believe TLG can keep up with the licenses most popular and appropriate for its time.

The points made about the variety of prices are also very good. You have starter sets that most people can afford, and you have sets that cost hundreds of dollars available to those with the budget and space to own those.

[badbob001]

Until the Star Wars brand dies or they lose the license to it.

[legoguy1984]

As long as they keep evolving Lego should never die. Just remember they started making wooden furniture(?) before making wooden toys and then moved onto plastic.

[BrickJagger]

So long as they overcome 3D printing I would say that there's no limit to how long they could go, at least in some form.

[IvanTheBuilder]

For my first two actuall topics this is going fine.

[davee123]

For the foreseeable future, they're fine.

Oddly enough, competition really isn't a huge factor for them, mostly thanks to the power of their brand. Their brand is widely seen as a wholesome, educational toy of high quality, and there's a great deal of brand loyalty. Competition could affect their market share, and reduce their prominent position, but there aren't any competitors currently poised to do that. Virtually ALL of LEGO's competitors are competing to be "the cheap alternative", and virtually none of them are competing to be a "high quality alternative". So LEGO's pretty secure in their position, even if they "cheap" market encroaches on them.

The biggest threat is probably one of the "cheap" competitors like Hasbro (who actually has a competing product and has leverage and decent licenses). If, for instance, Hasbro were to wrestle away the licensing for Star Wars, Superheros, and other strong licenses, and create a strong enough brand with its Kre-O product, it has potential to knock a large chunk out of LEGO's revenue. LEGO wouldn't be gone by any means, but they'd be less dominant.

Beyond that is simply relevance. LEGO seems to be the "it" toy for the moment, with parents clinging to the value of its brand. But as their product expands into lower quality areas that aren't seen as educational, their brand image may suffer. This is already noticeable in some markets, like resistance from feminist groups to LEGO Friends, or general reaction to LEGO being less creative than in years past (a common complaint of bloggers everywhere). If the LEGO brand loses value, they'll similarly lose market share and prominence. Again, they won't be totally gone, but it's possible that they sink back down to a "reasonable" size like they were before (rather than the hulking giant that they are seemingly now becoming!)

Beyond that, LEGO's got some more "out-there" threats that we can't predict:

3D printing is one. If (somehow) 3D printing becomes competitive price-wise with injection-molded plastic, then LEGO will have to react well. They might be able to survive by licensing "schematics" for their products, or incorporating other non-printable elements like electronics, patterned parts, or other materials, but it's very unclear at this point what that battle would look like. We'll have to know a lot more about what 3D printing is like in order to determine the effects on LEGO.

Environmentalism is also a possibility. As resistance to global warming trends rises, there could be movements to reduce production of plastics, including children's toys. If combined with 3D printing (like, say, re-usable printed plastic), LEGO again might have difficulty staying relevant. Or if virtual products can simulate physical ones. But that's pretty far out there-- society would have to change a lot for this to be a major threat to LEGO.

DaveE

Edited August 24, 2016 by davee123

[BrickJagger]

Environmentalism is also a possibility. As resistance to global warming trends rises, there could be movements to reduce production of plastics, including children's toys. If combined with 3D printing (like, say, re-usable printed plastic), LEGO again might have difficulty staying relevant. Or if virtual products can simulate physical ones. But that's pretty far out there-- society would have to change a lot for this to be a major threat to LEGO.

DaveE

If I remember correctly Lego has been making an effort to reduce the amount of ABS in each brick and replace it with more environmentally friendly materials.