Crownie

"Licensed Themes are more expensive." Is it true?

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I started this topic because I'd been reading a lot of complaints regarding the cost of licensed themes compared to their unlicensed counterparts and hadn't been able to find any reasoning for it here in the States. I did some quick data work consisting of the average price per piece of 9 different LEGO lines released in the year 2012. The results were as follows:

1) Dino at .146 cents per piece

2) Star Wars at .130 cents per piece

3) City Mining at .128 per piece

4) City Forest Police at .121 cents per piece

5) Lord of the Rings at .115 cents per piece

6) Super Heroes at .115 cents per piece

7) Friends at .109 cents per piece

8) Monster Fighters at .105 cents per piece

9) Ninjago at .104 cents per piece

This list brought up 2 good points: 1) Star Wars really is expensive, and could rightfully be responsible for tarnishing the price point of licensed themes, and 2) Themes with large molded pieces (i.e. Dino and City Mining) are inherently more expensive due to the specialized large molds created for them, which is why they appear towards the top of the list. Other than that, plus or minus .04 cents doesn't seem all that huge, though when you realize that it's per piece, it might have a bit more of an impact.

UPDATE: Several people from other countries have chimed in (see below), and it seems that elsewhere in the world, licensed themes really are more expensive (in some cases, ridiculously so). It seems that TLG prices products at what they think people are willing pay, not necessarily what seems fair.

So those licensing costs accrued by TLG? Are apparently passed on to the consumers, but only consumers in specific countries. :hmpf_bad:

Other thoughts?

Edited by Crownie

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There are certain sets that have seemed overpriced in some recent licensed lines but as a whole, I have to agree that the non Star Wars lines aren't all that much more expensive. The $20 price point especially has been very sweet in the Super Hero line price per piece.

I was very surprised at the Mining sets this year being as expensive as they were. I can understand Dino needing new large molds but most of what was in Mining was already available. And there weren't that many truly large pieces to skew the price that far.

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Very surprised at the cost of the City sets!

Dino has a lot of special large pieces, so that's fair enough. Star Wars we know has a premium price for the licence. LOTR has a high count of small pieces, so that is why it seems to be better value-for-money price-per-piece wise but I think as far as price-per-gram it would be higher on the list (or at least in the stats). Superheroes I would've expected to be higher, and then the other non-licenced themes below that, that is expected (with Friends slightly higher I don't find surprising). But I think all you've done is proven the original theory correct as a general rule, with an obvious exception (Dino) and also a curious exception (City).

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I can confirm that its true for Australia.

The following sets are all $49.99 on Shop @ Home USA. The prices after the item indicate the Australian price for the set.

City Marina $79.99

City Police Heavy Helicopter $69.99

City Train Station $79.99

Pre Vizla's Fighter $89.99

Y-Wing Starfighter $89.99

NinjaGo Wrecking Ball $79.99

Technic Bucket Truck $69.99

Dino Triceratops Tracker $69.99

Kingdoms Chess Set $69.99

Attack of the Wargs $99.99

Hulk's Helicarrier Breakout $99.99

Creator Seaside House $59.99

Batmobile and Two-Face $99.99

Bikini Bottom Party $89.99

Technic Jet Plane $69.99

Monster Fighters Crazy Scientist $79.99

Hayabusa $69.99

What that shows is that as a rule the markup on licensed sets (Super Heroes and Hobbit in particular) seem to be bigger than the markup on non-licensed sets.

A check of the other Hobbit sets confirms a 100% markup on all sets except for a 70% markup on the Bag End set and a 50% markup on the Goblin King set.

Markups on Marvel Super Heroes shows a 100% markup on the Captain America set, a 130% markup on the Spiderman set, a 150% markup on the Cosmic Cube set and the X-Men set, an 80% markup on the Quinjet set plus the 100% markup on the Hulk set.

For DC, its 100% on the Catwoman Cycle, 100% on the Batmobile, 70% on the Batwing, 100% on the Superman set, 80% on the Batcave and 120% on the Funhouse.

Even the City Mine only has a 30% markup. Dino Defense HQ is a 50% markup.

At the really big end of the scale, the Star Wars SSD is a 75% markup as is the Death Star. Imperial Shuttle is about 73%. Town Hall is 50%, 58% on Tower Bridge, 65% on the Robie House, 65% on the Unimog, 45% on the 4x4 Crawler and 60% on the Mindstorms NXT.

Edited by jonwil

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every set is more expensive here in malaysia where i am from, especially the case for star wars sets.

generally, we pay twice the price for any other themes, and two to three times the price for star wars.

for example:

4644 marina:

RRP is USD 49.99 which works out to be ~MYR152.7, but malaysia RRP is MYR309.90 which is ~USD101

10218 pet shop:

RRP is USD 149.99 which works out to be ~MYR458.3, but malaysia RRP is MYR899.90 which is ~USD294.5

9516 jabba's palace:

RRP is USD 119.99 which works out to be ~MYR366.6, but malaysia RRP is MYR819.90 which is ~USD268

7965 millenium falcon

RRP is USD 139.99 which works out to be ~MYR427.7, but malaysia RRP is MYR989.90 which is ~USD324

10212 imperial shuttle:

RRP is USD 259.99 which works out to be ~MYR794.3, but malaysia RRP is MYR1999.90 which is ~USD654

such a shame, that lego here is sold via a sole distributor which marks up prices to the point that it is highway robbery. it is also sad that this price structure is also the same in legoland malaysia, as most of the sets sold there are brought in by said distributor as well.

Edited by coffeeandcake

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What that shows is that as a rule the markup on licensed sets (Super Heroes and Hobbit in particular) seem to be bigger than the markup on non-licensed sets.

A check of the other Hobbit sets confirms a 100% markup on all sets except for a 70% markup on the Bag End set and a 50% markup on the Goblin King set.

Markups on Marvel Super Heroes shows a 100% markup on the Captain America set, a 130% markup on the Spiderman set, a 150% markup on the Cosmic Cube set and the X-Men set, an 80% markup on the Quinjet set plus the 100% markup on the Hulk set.

For DC, its 100% on the Catwoman Cycle, 100% on the Batmobile, 70% on the Batwing, 100% on the Superman set, 80% on the Batcave and 120% on the Funhouse.

Even the City Mine only has a 30% markup. Dino Defense HQ is a 50% markup.

This is very interesting. I've heard people say before that Australian prices are based upon what people are willing to pay - I wonder if that's a factor? Are licensed products as a rule harder to get a hold of or something? That seems like it'd be a bit strange. Maybe it is just that they know people will ultimately pay more for a licensed product. I'm a little ticked off on your behalf just thinking about it, though.

So perhaps what seems to be 'equal opportunity pricing' in the U.S. doesn't necessarily hold up overseas... :hmpf_bad:

Edited by Crownie

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Well I for one refuse to pay the rip-off pricing on Superheroes (which is why none of it has ended up in my collection even though I love how cool that Hulk set is) and certainly not on Hobbit (the exception being the Bag Send set which only has a 70% markup and is too cool to say no to once I can find one on sale :)

As for availability, other than the Funhouse (which is a retailer exclusive) the rest of the Superheroes line were certainly not hard-to-get when they came out. Hobbit hasn't reached Oz yet so I cant comment on that.

On LOTR the markup is 53% on Helms Deep, 100% on Uruk-Hai Army, 76% on Gandalf Arrives, 50% on Weathertop, 75% on Orc Forge, 50% on Moria and 100% on Shelob.

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In Holland they are more expensive then others, for example.

Lego Super Heroes Batwing Battle 6863 € 39.99

Lego Super Heroes Catwoman Catcycle 6858 € 15.99

Lego Lord of the Rings: Raadsel van de ring 79000 € 13.99

Lego Lord of the Rings: Aanval van de Wargs 79002 € 59.99

compared to:

Lego City politiehondenwagen 4441 € 31.99

Lego City Fire brandweercommandant 60001 € 10.99

These 6 sets compare to each other imo and the Superheroes/ lotr are more costly.

Edited by Cobb

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One thing that struck me was a few of the recent designer videos have given a little bit of insight into how some of the decisions are made in set budgeting and pricing, and also what sorts of things will count against the piece count if you will. In others words eat up the design budget in ways other that adding more pieces. We are all well aware that Minifigs take a bigger bite out of the set budget than simply the number of their pieces. But complexity of printing can increase that bite.

We also are aware and acknowledge that the large specialy molds such as Dino's, Jabba's , hulks, trolls, etc deeply cut into a sets budget / part count.

One that we often miss is new elements and molds. Especially unique new elements. Molds are a huge production cost. Pieces that are not general use, but rather limited to one theme and a handful of sets will take a huge bite out of those set budgets. This more than anything is probably where Star Wars gets the biggest price per piece hit. They have tons of specialized heads and similar. And none of them can be used outside of SW. Compare that to an unlicensed line like Chima. While it has a ton of special molds for heads, they don't have to be restricted to Chima. We may be seeing those lion croc and bird heads for years as CMFs etc. on the other side, while LotR is licensed, they don't have anywhere near some of the numbers of complex or limited molds that SW has. What new stuff LotR has offered can for the most part be used across broad product lines and is not theme specific. Not even the Wargs. The real thing that drives up set costs is exclusivity of parts.

There are definitely license fees that increase the costs. But the actual pricing is I suspect a lot more complicated than we can ever imagine.

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I'm sceptical about the cost calculations being complicated. the set prices are probably decided before they even have a piece count!

Each wave will consist of certain price points that they want to target and then the design brief will budget their piece count accordingly. It is probably far more vague that we think to begin with.

A lot of people talk about excessive molding prices but I don't believe half of whats printed. New tooling for a new brick or minifig part will be nothing like the 200,000 I've heard mentioned before. relaistically it should be a tenth of that at the most and probably not even that.

People charge whatever the local market will bear. Australia is seen as being a flourishing market due to its mining boom and companies are setting their price points to see what they can get away with. 100% mark ups are not uncommon. In the US you need to be a little more subtle as there is a huge number of toys in the market and you have to be competitive.

Licenses don't cost as much as people might think but they are a license to print money so somethign that is "branded" so to speak is generally going to be more valuable and more expensive.

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A lot of people talk about excessive molding prices but I don't believe half of whats printed. New tooling for a new brick or minifig part will be nothing like the 200,000 I've heard mentioned before. relaistically it should be a tenth of that at the most and probably not even that.

High temperature, high pressure, injection molds, the kinds used for precision things like ABS Lego bricks, or Styrene plastic model kits do in fact typically cost between a quarter and a half million dollars USD. Figure for Lego this will apply to any new structural or building elements. These are extremely expensive molds, but are typically expected to last a long time. They will often outlast the company that made them. So long as a production accident does not occur hey have a long life. ( I don't know what he average lifespan of Legos tooling is, but some well known plastic model molds have been in use and re use since the 60's or older. )

Molds and tooling for lower pressure, lower temperature plastics will cost less. This will be things that require less precision, are planned for a much shorter mold life, or things that can get away with lower quality softer plastics. This will include any of the softer plastic items, from the large molded figures such as Jabba or the Dino's, to special CMF accessories, to, at the lowest end, the more rubbery pieces sometimes seen for heads. While substantially cheaper, figure even then the tooling runs between Forty Thousand Dollars to about Two Hundred Thousand. ( my friends brother is an industrial designer who designs plastic toys. He's talked to my modeling club about the process and costs a few times.)

But while the costs seem high, remember these molds are the principle assets of an injected molded plastics company. They are the business. They are the principle investment.

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High temperature, high pressure, injection molds, the kinds used for precision things like ABS Lego bricks, or Styrene plastic model kits do in fact typically cost between a quarter and a half million dollars USD. Figure for Lego this will apply to any new structural or building elements. These are extremely expensive molds, but are typically expected to last a long time. They will often outlast the company that made them. So long as a production accident does not occur hey have a long life. ( I don't know what he average lifespan of Legos tooling is, but some well known plastic model molds have been in use and re use since the 60's or older. )

Molds and tooling for lower pressure, lower temperature plastics will cost less. This will be things that require less precision, are planned for a much shorter mold life, or things that can get away with lower quality softer plastics. This will include any of the softer plastic items, from the large molded figures such as Jabba or the Dino's, to special CMF accessories, to, at the lowest end, the more rubbery pieces sometimes seen for heads. While substantially cheaper, figure even then the tooling runs between Forty Thousand Dollars to about Two Hundred Thousand. ( my friends brother is an industrial designer who designs plastic toys. He's talked to my modeling club about the process and costs a few times.)

But while the costs seem high, remember these molds are the principle assets of an injected molded plastics company. They are the business. They are the principle investment.

My schooling background is in industrial design, and you are right on. Molds really are incredibly expensive to design and manufacture, especially for high-quality injection-molded plastic runs.

Edited by Crownie

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The big problem I see is that LEGO seems to design too many new parts and then use them in only one set.

Also they create new parts when existing parts would probably be a suitable fit instead.

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I think there are some issues at the retail level too.

I have seen licensed sets (Star Wars, Marvel) being sold at local drugstores at significantly higher prices than the MSRP. However, most regular sets (e.g. Ninjago) seem to be priced close to or at MSRP.

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So don't buy from retailers that sell above RRP, find retailers that sell at RRP (or better yet, buy from a store that is selling below RRP or that is having a sale)

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I'm seriusly considerig to stop byeing LEGO all together. Here in Sweden the prices are ridiculus :hmpf_bad: , I would not even dream of byeing from s@h way to expensive. Now I bye all my LEGO from a website who has lover prices than LEGO (altough still to expensive, like dubble US) but they dont have all sets so I'm limited to there stocklist :thumbdown: . If LEGO is keeping this upp for much longer I'm switching to......Megablocks just to spite LEGO! (thats how mad I am!) :angry:

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I'm seriusly considerig to stop byeing LEGO all together. Here in Sweden the prices are ridiculus :hmpf_bad: , I would not even dream of byeing from s@h way to expensive. Now I bye all my LEGO from a website who has lover prices than LEGO (altough still to expensive, like dubble US) but they dont have all sets so I'm limited to there stocklist :thumbdown: . If LEGO is keeping this upp for much longer I'm switching to......Megablocks just to spite LEGO! (thats how mad I am!) :angry:

Doesn't Amazon.co.uk ship to you?

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I'm seriusly considerig to stop byeing LEGO all together. Here in Sweden the prices are ridiculus :hmpf_bad: , I would not even dream of byeing from s@h way to expensive. Now I bye all my LEGO from a website who has lover prices than LEGO (altough still to expensive, like dubble US) but they dont have all sets so I'm limited to there stocklist :thumbdown: . If LEGO is keeping this upp for much longer I'm switching to......Megablocks just to spite LEGO! (thats how mad I am!) :angry:

As sad as it is that Lego is much more expensive in certain parts of the world, that is not the topic of this thread. Please stay on topic.

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A lot of factors go into pricing products for consumers. What it costs to make and what people will pay are two different things. If a consumer doesn't see the value in something they won't buy it. I'm sure as a whole Licensed themes can be more expensive for TLG to pay the licensing fees, but by looking at numbers I don't see them being that much more expensive than unlicensed themes. I mostly just buy licensed sets these days it seems, so I can't speak of other themes, but I have noticed quite a few City sets were pricier than expected. I like the idea of 10 cents/piece, but it isn't the best estimate for everything. Typically, what are you willing to pay and do you see good value in that price? For example, Jabba's Palace was MSRP at $120, but I only bought it when I saw it on sale for $100. I was comfortable paying that price, but I've since seen it for $80 at a few retailers which obviously is a much better price and much closer to the 10 cents/piece ratio.

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There are quite a few discussions on similar topics (here or here).

From the consumer's perspective, price-per-piece is a bit misleading, as small sets with a higher ratio of minifigs/piece will have lower overall price-per-piece than larger sets with lower minifigs/piece ratio. This is because TLG tends to price smaller sets more expensively (on a price-per-piece basis), probably because they can get away with it because people buy them for the minifigs and also because packaging and distribution costs don't increase linearly with the number of pieces. For example, a $13 set with two minifigs usually has a much higher price per piece than a $100 set with eight minfigs. So I find a more useful comparison to be price-per-piece after taking into account the minifigs -- subtract a fixed amount from the price for each minifig (e.g. $2) and subtract a fixed number of pieces for each minifig (e.g. four), and then divide the adjusted price by the adjusted number of pieces. That should allow better comparison of large and small sets.

Why does this matter? Well, if a theme had lots of small sets and few large sets, it would tend to have a higher raw overall price per piece ratio. So then you don't know whether the additional cost is due to licensing, or due to the variation in piece-count distribution. I haven't run the adjusted ratios on the themes listed above, but it would be interesting to see if it changed the results.

I think that TLG does price sets higher that have larger pieces (like the Dino sets), although this may be due to mold costs too. It's hard to know how much new molds add to the cost, since we only have estimates for the price of molds (around $20,000 unless it's going to be used for a very high-volume part), and the average sales volume of a new set (around 300,000 is the best estimate I've seen). Those estimates would bump a set's price up by about six cents for each new mold, less if the mold is used on multiple sets or for more than one piece per set. The Dino sets might also be priced higher because the larger pieces result in larger packaging and therefore higher distribution costs.

Overall, licensing and royalty is only 4% of the retail price of an average set. Considering that some of that goes to royalties paid to KIRKBI (the family holding company), theme licensing fees probably don't really account for much of the difference in price. I'm guessing that licensing, molds, packaging, distribution, etc all factor into a set's price, but at the end of the day, TLG prices the sets based on what they think they can sell it for.

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Nice Marmot - thank you for chiming in! Those discussions you linked to look very interesting. I still tend to think in terms of 'price per piece' - most likely because it's an easier way to communicate ideas regarding set cost, but it's amazing to consider just how complicated LEGO pricing structure really is. A lot of food for thought.

Edited by Crownie

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The big problem I see is that LEGO seems to design too many new parts and then use them in only one set.

Also they create new parts when existing parts would probably be a suitable fit instead.

They have gotten a lot better about this since 2003. That was a large part of Bionacle's downfall. Yes the sets sold well and were popular, but Lego or rather the management at the time kind of lost track of what was really going on. They were spending more to make the line in new molds and designs and such, than they were bringing back in. And they ended up with a ton of weird hard to use elsewhere molds as a result.

These days they are much better at predicting uses and amortizing costs over time. Yes some new parts may not have been spread as widely as we might hope yet. Such as the 2x2 studded tiles seen in the Ninjago Samuai mech. But those are long term structural parts, the molds for which are expected to last for years or decades. So they will amortize the costs over a long period of time and we will slowly see the parts spread.

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Sets with license cost more than the standard, perhaps because LEGO knows that there is a lot speculation on the resale of the characters from those sets :hmpf_bad:

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