Mattel buys Megabloks

[korpen4444]

The way these things go is that Lego would be given the right to renegotiate the contract. If Mattel bids for it, Lego would have to match or beat Mattel's offer.

Which means if Mattel got the DC license, it would be because Lego let them, not because DC gave it to them.

Well then let's hope Lego beats Mattel's offer!

But, yeah, MB will continue to suck, no matter who buys them.

I have a couple Kre-O stuff and it seems like second-place to Lego(great quality). MB is at least 3rd place(and I haven't touched the stuff).

[rzetlin]

Lego finally did it:

Lego Is The Biggest Toy Company In The World

[Lyichir]

Megabloks will be hard to "bring up to Lego quality". The problem with Megabloks isn't the design. It's the plastic. They use Polystyrene instead of ABS. It's a common Injection Molded plastic. Most plastic models are made from it. But it is nowhere near as durable or precise as ABS. It's great for plastic models. styrene can be chemically melted so it glues well. Plus styrene tooling is designed for lower temperature lower pressure injection. (So it doesn't cost as much as ABS to make new molds). The downsides is styrene is more brittle, is more prone to environmental factors like temperature, and is prone to warp. Plus it is softer plastic and does not hold its edge or clutch power over time. It's a bad choice for a construction toy. But here's the thing. The capital in Megabloks (or Lego) the value is ultimately in the tooling. It's the molds and machinery. In order for Mattel to brink Megabloks up to Lego quality they would need to retool everything. Pretty much toss the bulk of what they just bought and start with all new tooling and machinery.

Now they might be able to do some sort of rolling transition over time, where they slowly spin up some lines in ABS. But even then things can get weird. The companies two primary profit drivers are Halo and COD. And those lines are pretty much fixed in the Styrene design world now. It's the only material that really allows for the rapid new single use parts that the lines require.

I suspect that Mattel is not really seeking to displace Lego in the construction toy world. Sometimes better returns can be achieved by sitting in the #2 slot and drafting behind the leader. You make good profits with less effort and expense if you do it right. (Just ask Burger King. They work hard to stay right at #2). Mattel is looking to jump on Lego's growth train. Not necessarily challenge Lego head to head.

I agree with this. Mattel's goal in purchasing Mega Bloks isn't to revamp the brand or put Lego out of business. They simply aim to fill a hole in their portfolio (that of plastic building blocks), one that their two biggest competitors (Hasbro and Lego themselves) have already filled. Lego's success in the past few years has been atypical for the industry in these economic times, and Mattel wants a piece of that pie. I think the biggest change we can expect for Mega Bloks in the immediate future is one of distribution. Mega Bloks already boasts a comparable level of shelf space to Lego in the Americas, and Mattel has the resources to push it into developing markets like Asia as well. And, of course, Mattel will be able to more easily make Mega Bloks lines based on their own properties, similarly to what Hasbro does with Kre-O. As for Lego? I don't see them being any more threatened by Mega Bloks than they were when it was independently owned.

[jluck]

People act like this is a gang war or something and are fiercely defending Lego while bashing Mega Bloks. Some are worried, or telling others not to be like Lego could actually be in trouble. Really, isn't this a GOOD thing though? More competition means Lego might up their game even more. More competitive pricing, better quality, even more fresh and innovative ideas, etc.

Obviously Lego is and will continue to be the top dog in the building category. They better be, that is their main focus after all. Kre-O for Hasbro and Mega Bloks for Mattel are just one of a million types of different products those companies offer so they don't have the same focus on them. They just use them to buffer overall sales. If by some chance Mega Bloks becames more popular than Lego wouldn't that be ok though?

That would mean Mega Bloks has obviously surpassed Lego in a number of regards, whether it be innovation, quality, etc. It's not like Mega Bloks is going to steal the top spot and run Lego out of business with their poor interlocking bricks, lack of actual building components, and mass licensing. At least I would hope not. It's like people think Mega Bloks even has the chance to run Lego out of business offering the same "cheap" product they do now (the perception many consumers have of Mega Bloks...). and that is all we will be left with to buy. If by some chance Mattel is able to make Mega Bloks the number one building brand in a decade or two, then then something will have obviously changed. Either Mega Bloks has a huge surge in quality and innovation or Lego would of had to make a TON of horrible mistakes to kill themselves off. Regardless it's not going to happen over night and without reason.

Exactly! Lego will only benefit from competition, if MB is able to provide that competition is something we must wait and see on. I am highly loyal to Lego, but that's due to the quality and innovation Lego has. If Lego were to lose that, they'd have nothing left to offer me.

[Faefrost]

The more I think on it, the less I think this will have much impact on ?Lego, at least in the short to medium term. Megablok's traditional issue isn't really one of getting shelf space from the retailers, as much as it has been filling it and keeping it filled in a timely and predictable manner with the elements of their product line that do sell well. Megabloks has faced more production and logistics issues than simply ones of merchant relations. Mattel can use their clout to force shelf space all they want, but they will have a fairly large overhaul and ramp up before MB can produce and deliver sufficient product to keep that shelf space filled and flowing.

Now there are a few benefits for MB that Mattel will bring to the table. Lego's greatest strength, and much of the source of its phenomenal growth in a down market, is not simply its product or product quality. It's the back end. Production, infrastructure, logistics and constant feedback loops and evaluation tools. We often wonder why Lego does not have more of a presence in certain countries or regions. Such as Asia. It's because they are going slow and building out this back end. Which is slower but in the end much better, than simply shipping product in. (Do not create a strong interest or demand in a developing market until you are ready to be the best source of fulfilling that demand.) anyway Mattel is certainly far better at this sort of thing than Megabrands ever was. Just the ability of Mattel to bring their feedback tools into play will do a world of good for MB. Currently a store will get a large shiny shipment of new MB products in for the season. Fully stock the shelves, and the good high desire items will zip out overnight. Then the other stuff just sits there. And festers. Sometimes for years. There is no feedback loop from MB to pull that back and replace it with what is selling. There are no loops to tell them where that festering product needs to go to sell.

Honestly? I think Mattel just took on a huge challenge with this one. It will take them at least 18-24 months to even begin to get a handle on MB's distinctively French Canadian corporate culture, and start to bend it to Mattel's will and processes. I'm betting it will not be a pleasant transition for any involved. It will probably be 3-5 years before any real results are seen on store shelves or market share. (Assuming Mattel doesn't just fire the lot of them and ship the machinery to China, simply keeping the marketable brand. Which would still probably need 12-18 months to pull off.)

[Wodanis]

The more I think on it, the less I think this will have much impact on ?Lego, at least in the short to medium term.

Now there are a few benefits for MB that Mattel will bring to the table. Lego's greatest strength, and much of the source of its phenomenal growth in a down market, is not simply its product or product quality. It's the back end. Production, infrastructure, logistics and constant feedback loops and evaluation tools. We often wonder why Lego does not have more of a presence in certain countries or regions. Such as Asia. It's because they are going slow and building out this back end. Which is slower but in the end much better, than simply shipping product in. (Do not create a strong interest or demand in a developing market until you are ready to be the best source of fulfilling that demand.) anyway Mattel is certainly far better at this sort of thing than Megabrands ever was. Just the ability of Mattel to bring their feedback tools into play will do a world of good for MB. Currently a store will get a large shiny shipment of new MB products in for the season. Fully stock the shelves, and the good high desire items will zip out overnight. Then the other stuff just sits there. And festers. Sometimes for years. There is no feedback loop from MB to pull that back and replace it with what is selling. There are no loops to tell them where that festering product needs to go to sell.

Honestly? I think Mattel just took on a huge challenge with this one. It will take them at least 18-24 months to even begin to get a handle on MB's distinctively French Canadian corporate culture, and start to bend it to Mattel's will and processes. I'm betting it will not be a pleasant transition for any involved. It will probably be 3-5 years before any real results are seen on store shelves or market share. (Assuming Mattel doesn't just fire the lot of them and ship the machinery to China, simply keeping the marketable brand. Which would still probably need 12-18 months to pull off.)

I think you are right on this. Mattel is covering an area they don't utilize yet. Building toys. It will take time to see what direction they plan to take with MegaBlocks. I suspect they will try to make the brand a direct competitor of Lego in the long term. However that is a long way off.

Lego has had supply issues with meeting demand in the past so you are quite right they will have the logistics in place before they have a product commitment to the Asian region.

I really don't think anyone is going to knock off Lego as a company. They will have their own internal challenges to keep growing and succeeding. Lego emotes a very specific appeal to children and adults who grew up with it and continue to enjoy the products. They created a 'system of play' and that is not easily replaced by Mattel or Hasbro toys.

[Gnac]

If they make a new kind of grey which makes everyone go "oOoOo", I'm going to prepare for the worst.

[The Kumquat Alchemist]

If you walk the toy aisles at Walmart, they are full of cheap looking plastic junk for the most part. The LEGO section is very small. The other toys mostly look like cheap junk, which us quite popular in the USA , and much of this junk is made by Mattel. It is scary how much shelf space they control.

What horror stories are these?

I must truly take my nearby Wal-Marts' LEGO selections for granted; both nearby me have at least one whole shelf's length of space dedicated to LEGO.

Edited March 4, 2014 by The Kumquat Alchemist

[Snark]

People act like this is a gang war or something and are fiercely defending Lego while bashing Mega Bloks. Some are worried, or telling others not to be like Lego could actually be in trouble. Really, isn't this a GOOD thing though? More competition means Lego might up their game even more. More competitive pricing, better quality, even more fresh and innovative ideas, etc.

Obviously Lego is and will continue to be the top dog in the building category. They better be, that is their main focus after all. Kre-O for Hasbro and Mega Bloks for Mattel are just one of a million types of different products those companies offer so they don't have the same focus on them. They just use them to buffer overall sales. If by some chance Mega Bloks becames more popular than Lego wouldn't that be ok though?

That would mean Mega Bloks has obviously surpassed Lego in a number of regards, whether it be innovation, quality, etc. It's not like Mega Bloks is going to steal the top spot and run Lego out of business with their poor interlocking bricks, lack of actual building components, and mass licensing. At least I would hope not. It's like people think Mega Bloks even has the chance to run Lego out of business offering the same "cheap" product they do now (the perception many consumers have of Mega Bloks...). and that is all we will be left with to buy. If by some chance Mattel is able to make Mega Bloks the number one building brand in a decade or two, then then something will have obviously changed. Either Mega Bloks has a huge surge in quality and innovation or Lego would of had to make a TON of horrible mistakes to kill themselves off. Regardless it's not going to happen over night and without reason.

I am genuinely surprised it took 40+ posts before someone had the good sense to point out that competition is generally a good thing for the consumer.

There's this weird tribalism I find with a lot of Lego fans; it's not enough to just love Lego, you have to loudly profess your hatred of competitors as well. Personally, I like all three of the major brands for different reasons. Lego will always be No.1 in terms of quality, but Megabloks has some cool videogame licenses that Lego seems unlikely to ever target, and Kreo gets me decent quality bricks at a cheaper price. Also, those Transformer kreons are hella cute.

But yeah, here's hoping that increased competition leads to more innovation and more competitive prices.

[Cult_Of_Skaro]

I completely agree. I remember Elementary when the girls in my class would pick up American Girl books, each dedicated to an individual character from the Toy line. Heck, even I read the books from time to time. Nowadays, it's just a girl in a box. It's sad to say that the Toy industry is plummeting, or at least that's what sales are indicating. If your going to go down in sales, go down in class.

My sister gets the dolls occasionally, and they still make books for them.

[agentsmith]

i'm hoping for a small drop in price on lego sets , lego has quality both in durability and set overall design , i wouldn't join a "side" , if mega blocks or kre-o would be interesting at all i would buy them but i fall into the 5% category of lego costumers who just buy lego for display and maintain my ocd i think

[Brandon Miller]

You know what's coming next... Disney buying LEGO. Make it happen!

Please no.

[jfbat]

Just today overheard the shop manager of an Intertoys (the biggest chain of toystores in the Netherlands) saying they (Intertoys) will stop selling Mega Blocks in the near future and have already stopped ordering the brand.

It'll be interesting to see what will happen with Mega Blocks over here, because I got the idea that they're actually doing quite bad in the Netherlands (and Europe in general). Most often the sets are hugely discounted, which lends them an aura of being one of those cheap brands that nobody really wants, but gets when lnot being able to afford "the real deal" or having to get something for the kid of people they're not really friends with.

Maybe with some Mattel-advertising efforts and product developement investment they'll be able to turn things around. With Mattel backing them, they should be able to attract some interesting licenses. Also: Mattel is still a force to be reckoned with, having some brands that simply are must haves for toy stores, and it is not uncommon for companies like that to use that power to also generate shelfspace for other brands they own. No doubt we'll see the brand regaining some shelfspace in the future. But they will have to up quality, invent some interesting themes and make sure the public knows about it.

But maybe Mattel won't really change anything and just wanted to get in to this market without having to build a brand first.

[DraikNova]

I used to like Mega Blocks quite a bit. Their dragon series was a pretty nice, albeit very simplistic, product, with rather good quality. I stopped buying any sets at all about 4 years ago. The point at which the quality started to decrease was, ironically, around the time Bionicle started getting fragile parts. It's rather ridiculous that the quality would decrease as much and as suddenly as it did. Really, I am rather excited if this forces LEGO to up their ante as much as possible. Sure, most LEGO sets are great, but in every line, there appears to be one set where the designers just weren't thinking too clearly. And the prices are sometimes rather ridiculous, although here, at least, most of that appears to be caused by some strange tariff.

Edited March 5, 2014 by DraikNova

[AmperZand]

It'll be interesting to see what will happen with Mega Blocks... one of those cheap brands that nobody really wants, but gets when lnot being able to afford "the real deal" or having to get something for the kid of people they're not really friends with.

You make a good point. LEGO is a premium brand and has done remarkably well to grow the way it has against the backdrop of an economic downturn in most of its key markets during the last few years. At the same time, the economic woes have meant that consumers have sought cheaper brands which has fuelled the growth of sub-prime brands such a Mega Bloks and a slew of Chinese clone brands.

As the global macro-economic situation begins to pick up, sub-prime and clone brands will find it harder to compete as consumers return to formerly unaffordable premium brands such as LEGO. As has already been pointed out in this thread, Mega Bloks isn't well placed to improve its quality and become a premium brand. It is committed to moulds that only take inferior plastic. I suspect that retooling all their moulds to take the higher quality plastic, ABS, that TLG uses would be a capital expenditure that would fail any cost/benefit test. In other words, in the next few years, Mega Bloks will find it harder to compete and TLG will gain market share. What the leadership of Mattel is probably counting on is that the construction toy market will continue to grow rapidly. In other words, Mega Bloks' slice of the pie will decrease relatively but increase in absolute terms.

[AmperZand]

There's already a lengthy thread about this in the Community forum.

If there's a friendly mod lurking nearby, perhaps the two threads should be merged.

[HawkLord]

Look at Hasbro's Kreo line. It's relatively failed so much so that it is now going to be a TRU exclusive line only, despite having big licenses like Transformers and Star Trek. Hasbro could not keep it going strong enough at other retailers who had limited space compared to TRU, like Target and Walmart. Overall, the Kreo product isn't that bad, but lack of creativity and innovation hurts it. The Transformers line had fewer appealing Kreons, which were the major selling point as most of the set pieces were boring. The Star Trek line had great vehicles, but Hasbro really milked the market when it came to character selection forcing people to buy all the sets to get a complete crew.

Now, my experience with Mega Bloks is limited, I have only bought a couple of WoW items and have never really been impressed with them - to me they're more a side novelty when there's nothing out for Lego that I'm interested in. I've been interested in the Halo stuff, but never bothered.

Sure, Mattel is a big deal company and has vast resources, but Lego has the lock on huge licenses like Star Wars, Marvel, and DC (even though Mattel has the lock on DC action figures, I don't think DC is going to move from Lego especially given components like the DC characters in the Lego Movie). If anything, it will take a lot of time for Mattel to catch up to Lego's history, so even if Mattel started making waves tomorrow, those waves wouldn't really be felt for years to come. By then Lego could be on their fourth or fifth movie and be riding high on the new Star Wars movies and every Marvel character in the book. Closing comment - there's nothing to worry about as far as threats to Lego.

[62Bricks]

Exactly! Lego will only benefit from competition, if MB is able to provide that competition is something we must wait and see on. I am highly loyal to Lego, but that's due to the quality and innovation Lego has. If Lego were to lose that, they'd have nothing left to offer me.

Except this deal actually means less competition, doesn't it? LEGO already competes with Mattel (not directly in the construction-toy business, but they are both toy companies and they compete for license deals). Now one of its competitors is buying another of its competitors, so there is one fewer large toy company out there.

[jfbat]

Except this deal actually means less competition, doesn't it? LEGO already competes with Mattel (not directly in the construction-toy business, but they are both toy companies and they compete for license deals). Now one of its competitors is buying another of its competitors, so there is one fewer large toy company out there.

Yes, but on the other hand Mattel will likely be able to spend more money on product developement and stuff like that, so Mega Blocks might become a more serious competitor in the specific market LEGO operates in.

[AusAFOL]

I am possibly going to cause some shock and horror with the following comments.

I will point out I am an AFOL at heart although I do also build other brand construction toys and often enjoy them although not as much as LEGO.

I don't see Mega Bloks trying to compete with LEGO at all, Infact they are polar opposites in terms of themes and seem to be doing themes that LEGO has not and will not get involved with.

EG Mega Bloks Call Of Duty (Obviously LEGO is not interested in such a theme due to war violence and guns)

Mega Bloks Assasins Creed (Coming soon but again LEGO would not want to touch on such a theme due to the nature of it)

To me LEGO represents all thats good and well in the world with happy little towns mythical creatures and where the worst charachter you will meet is a robber, other than that it is all happy land and rainbows and unicorns.

Mega Bloks on the other hand seems to be going for a different demographic altoghether (older gamer type folks who probably have zero interest in LEGO but will buy a set because it is something from a video game)

I don't think you will ever find someone who says that LEGO is not the best quality construction set on the market.

However

Should you want some amazing detailed guns and weapons that look realistic then Mega Bloks has that for you.

Believe it or not it was a charachter building set that brought me out of the dark ages (a small Doctor Who Set), I did not buy it because I wanted a construction toy but instead bought it because it was Doctor Who, I sat and built the set and then the memories of how I loved LEGO came flooding back, I think any brand set that brings back such memories of LEGO is a good thing for LEGO and good for expanding the number of AFOL in the world.

Just my 5c but feel free to throw the full 5c back at me :-)

[SheepEater]

To me LEGO represents all thats good and well in the world with happy little towns mythical creatures and where the worst charachter you will meet is a robber, other than that it is all happy land and rainbows and unicorns.

:devil:

Edited March 9, 2014 by SheepEater

[B-Lister]

Mattel is the only one buying Mega Bloks!

[AusAFOL]

:devil:

Yes with the exception of a few licensed sets, Still a majority are a happy go lucky colourful fest :)

[Lego Otaku]

Yes, but on the other hand Mattel will likely be able to spend more money on product developement and stuff like that, so Mega Blocks might become a more serious competitor in the specific market LEGO operates in.

Historically anything Mattel bought, they cheapened construction method and design to make it cheaper and more profitable. Megajunk is already cheap junk that don't work reliably. I can't see Mattel investing on just this one, and I don't know how they could make it worse without making it a complete and utter failure.

[TheLegoDr]

I'm sure it was mentioned earlier, but Mattel and Mega Bloks already teamed up for their Barbie building sets. So Mattel was already trying to get into the construction toy business on the female side of things. Now with these other licenses, they will have a bigger piece in the market. But that doesn't mean anything. It seems most people that are already into LEGO won't pay much attention to MB outside of seeing it on the shelves. The families that want a building block set, will buy anything they can afford.