1974 Posted May 25, 2013 (edited) Interesting article .. : http://www.businessw...-new-york#r=rss ‘Life-Size’ X-Wing Starfighter, World’s Biggest Lego Model, Lands in New York By Brad Wieners on May 23, 2013 http://www.businessw...nds-in-new-york Star Wars saved Lego. Star Wars almost killed Lego. Both statements are equally true, and the Danish toymaker provided a perfect moment to contemplate this paradox earlier today in a muggy Times Square, when it unveiled the world’s largest ever Lego model: a 5.3 million-brick, “life-size” X-Wing Starfighter. The Star Wars-themed, 46,000-pound spacecraft (on display through May 25) took 32 people more than 17,000 combined hours to snap together, and arrived in 34 sections by container ship from Kladno, Czech Republic. It has a 2 million-brick lead on the former biggest Lego record-holder, a 3 million-brick robot in the Mall of America in Bloomington, Minn. “It has a steel infrastructure that’s built to the seismic code for Carlsbad, for Legoland California,” says master builder Erik Varszegi, a designer on the X-Wing “build,” as enthusiasts say. “It’s really the same design as the retail set, but at 42 times the scale.” Like the gargantuan inflatable characters that loom above the Macy’s (M) Thanksgiving Day Parade, the X-Wing seemed, initially, an alien presence at Broadway and 46th Street in New York—and yet, within seconds, completely self-evident. A publicity stunt in and of itself, the X-Wing unveiling also promotes a series of other projects: The Yoda Chronicles, a new miniseries on the Cartoon Network (TWX); Disney (DIS) (now Star Wars’ owner) starting production on Rebels, a new animated Star Wars series; and, of course, the 2015 movie from J.J. Abrams. Less formally, the X-Wing symbolizes an obscenely profitable partnership, now in its 14th year, that has sold more than 200 million building sets, 30 million copies of four video games (according to NPD Group), and 450 different Lego Star Wars mini-figures. Lego Star Wars has been a major contributor to a five-year run during which Lego has averaged 24 percent year-on-year growth in sales and 40 percent growth in profits. Courtesy David Robertson Yet the success of Lego Star Wars, beginning in 1999, “really almost killed the company,” says David Robertson, a professor at the University of Pennsylvania’s Wharton School and author of a new book-length case study, Brick by Brick: How Lego Rewrote the Rules of Innovation and Conquered the Global Toy Industry. “It’s a fixed-cost business, and after the success of the initial Lego Star Wars lines, they shipped—and retailers stocked—similar volumes the next year. But in 1999, and again in 2002, they had the prequel movies to drive sales. In years without a new movie, sales went off a cliff, and retailers ended up having to discount a lot just to clear the shelves.” Lego Star Wars’ strong sales numbers at the start also masked the company’s deeper financial problems in the early Aughts, so much so that it came as a shock to company’s directors that the Lego Group was nearing bankruptcy in 2003. Most crucially of all, Lego’s management drew the wrong lessons from Lego Star Wars, its first intellectual-property deal—principally, that all future growth would come through brand extensions and innovation. The company undertook big, expensive moves into theme parks and video games, almost all of which required significant investments and which it tried to do in-house. “They were just innovating like mad, trying everything, and a lot things they frankly weren’t good at,” says Robertson, whose book, due out in June, chronicles how Lego lost its way embracing all the vogue business precepts of the late Nineties—“be customer driven,” “practice disruptive innovation,” “head for blue-ocean markets.” Fortunately, in Star Wars, Lego also had a product line that reconnected Lego with its core customers—not just 7-year-old boys, but also (mostly male) adults who remain 7 at heart (aka AFOLs: adult fans of Lego). “We have 250,000 known AFOLs in the global community,” says Michael McNally, brand director for Lego in North America. “Of that total, we estimate about 60 percent of them would identify Star Wars as their biggest Lego passion, or who would say that Lego Star Wars reignited their passion for Lego building in general.” Many AFOLs tell a familiar story of “drifting” from Lego as teens and twentysomethings but coming back to Lego out of nostalgia, or because of Mindstorms, Lego’s programmable robot kits. “Although the growing AFOL community accounted for only 5 percent of the company’s total market by the early 2000s, the average adult fan outspent the average family with kids by a margin of roughly 20 to 1,” Robertson reports. “These black-belt Lego hobbyists also were a potent marketing machine for Lego,” he adds. “It was not unusual for four or five AFOLs to show up at a Lego fan event and build a jaw-dropping creation, such as a 9-foot-tall replica of Chicago’s Sears Tower, which would draw 20,000 kids and their parents, as well as local media.” Right as Lego escaped disintegration, in August 2005, a veteran manager convinced the founder’s grandson and owner, Kjeld Kirk Kristiansen, and Jørgen Vig Knudstorp, who’d recently been appointed chief executive officer, to attend an AFOL jamboree in Washington, D.C. The show, called BrickFair, drew longtime fans who had built Star Wars vehicles and scenes out of Legos well before the themed kits existed and, eight years before Flickr, hosted online forums to share photos of their creations. Over nearly three hours one day at BrickFair, Robertson says, the AFOLs “really let [the owner and CEO] have it. They said, ‘We’re more passionate about this brand—we care more about it—than you do.’” They said Lego’s biggest mistake had been to move away from the system of bricks and other elements that all fit together, and to make the sets easier to assemble. This had undermined the sense of accomplishment kids felt after finishing a build. It’d be overstating things a bit to say this one meeting was the crux of Lego’s turnaround, but Knudstorp still refers to it in interviews. Themes—stories on television and in movies—might be essential to selling Legos to the successive generation of kids, but the underlying Lego system had to be consistent, challenging, and universal. The last thing any kid or parent wants is a bin of Legos in the back of a closet that’s incompatible with other Legos. “The new series like Yoda Chronicles has been helpful attracting new fans in years without a movie,” says X-Wing designer Varszegi. “But just as important has been keeping the original Star Wars sets in rotation. The classics. From the first three movies.” To borrow a phrase: You never really own a Millennium Falcon, you just take care of it for the next generation. ETA: Please don't merge this with the current lifesize X-Wing thread. The article is really not about that. I like the hard facts (allthough I have no way of verify them) as the subject of what AFOLS spend and how many they are comes up in discussions from time to time .. Edited May 27, 2013 by Fugazi embedded article Share this post Link to post Share on other sites
Faefrost Posted May 26, 2013 (edited) There is a video out there of David Roberts lecture on the subject. http://vimeo.com/48823145 It's truly fascinating and worth watching, both for Lego fans and as a superb look at a business. Edited May 26, 2013 by Faefrost Share this post Link to post Share on other sites
Andy D Posted May 26, 2013 (edited) I thought he number of AFOL's LEGO has identified and the spending by b AFOL was very interesting. I knew that AFOL's spend a lot, but 20 times more than the average family with kids, wow! I assume this means that if you find one family and one AFOL that the AFOL will out spend the family, but just thinking about the revnue generted by AFOL's is quite significant. Thanks for he link. Andy D Edited May 26, 2013 by Andy D Share this post Link to post Share on other sites
Faefrost Posted May 26, 2013 I thought he number of AFOL's LEGO has identified and the spending by b AFOL was very interesting. I knew that AFOL's en a lot, but 20 times more than the average family with kids, wow! I assume this means that if you find one family and one AFOL that the AFOL will out spend ine family, but just thinking about the revnue generted by AFOL's is quite significant. Thanks for he link. Andy D That is fascinating, but it makes sense. Most of the families with kids tend to buy the smaller sets. Maybe one or two of the larger ones as a big centerpiece for play. Probably a total collection of bricks somewhere in the 10,000 range. An AFOL, even one just coming back into the hobby, will tend to gravitate to the larger more adult oriented sets. Their parts library will rapidly hit between 50,000 and 100,000. (Heck, Just spinning around in my desk chair I can spot 15 sets displayed on my office shelf each having well over 1000-2000 pieces.) Share this post Link to post Share on other sites
Pop Bumper Pete Posted May 26, 2013 That is fascinating, but it makes sense. Most of the families with kids tend to buy the smaller sets. Maybe one or two of the larger ones as a big centerpiece for play. Probably a total collection of bricks somewhere in the 10,000 range. An AFOL, even one just coming back into the hobby, will tend to gravitate to the larger more adult oriented sets. Their parts library will rapidly hit between 50,000 and 100,000. (Heck, Just spinning around in my desk chair I can spot 15 sets displayed on my office shelf each having well over 1000-2000 pieces.) have to agree, total pieces from when I was a kid, about 12,000 since reconnecting with Lego 4 months ago, I have probably added another 18,000 (mostly modular and other big sets) Share this post Link to post Share on other sites
BrickG Posted May 26, 2013 Adults have actual $$$. I couldn't afford an action figure when I was a kid. My parents didn't even give me allowance (though I'd get paid a bit if I did the chores). I can easily see why adults buy more. Share this post Link to post Share on other sites
Wolfolo Posted May 26, 2013 Just returned from a Lego event here in Italy (Brick on the beach - Jesolo, Venice): I can confirm that the SW stand was the most appreciated (it featured some 2003 models and many UCS sets), I noticed that Lego seem to put the best efforts on the SW sets as they are bigger, most recognizable (maybe not by kids, but there were some >30 years old kids roaming all around the stand) and with lot of particulars. I think SW it's the main theme for adults by Lego, and they well know it, so as BrickG said, as adults have $$$ they found the right target. Share this post Link to post Share on other sites
Bobskink Posted May 26, 2013 (edited) Interesting and I can see how it happened. Strange thing I have the impression that they are making the same mistake again. Not with Star Wars, but the other liscended themes. Over here in Belgium, possibly the rest of Europe aswell, they have all end up on sale so far. Edited May 26, 2013 by Bobskink Share this post Link to post Share on other sites
Boxerlego Posted May 27, 2013 WOW! This is interesting. I like to point out that Jar jar binks killed star wars and the ripple of this was felt by LEGO. So that begins said jar jar binks is the one that almost killed LEGO. Amazing X-wing...that was humongous. Share this post Link to post Share on other sites
Flipz Posted May 27, 2013 There is a video out there of David Roberts lecture on the subject. It's truly fascinating and worth watching, both for Lego fans and as a superb look at a business. Found the full version: http://vimeo.com/34924096 VERY interesting talk, I recommend it as well. Share this post Link to post Share on other sites
Faefrost Posted May 27, 2013 His book is being released next month. 6/23. Amazon is taking preorders for those interested. Share this post Link to post Share on other sites
LEGO Historian Posted May 28, 2013 For those of you who were AFOLs back around the turn of the millenium, it's rather ironic how TLG for the longest time ignored the AFOL market. It wasn't until 2001 when LEGO Direct first started up (with Brad Justus), that AFOLs finally started getting respect from TLG. And of course that was around the time Bricklink came online as well to help with spare parts sales. One of the big bonus areas for Star Wars was the fact that crossover collectors (of other Star Wars products) came and bought LEGO sets to be part of their "collectible" genre. Share this post Link to post Share on other sites
Aanchir Posted May 29, 2013 It's good that this part of the LEGO Group's history is no longer being overlooked. I've heard it said many times that LEGO Star Wars SAVED the company, almost as many times as I've heard that BIONICLE saved the company. But in truth there was no silver bullet. There were several factors that helped TLG get back on top, not least of which was the restructuring that took place under Jorgen Vig Knudstorp. I'm grateful for LEGO Star Wars, though, because it definitely was a major step towards story themes like BIONICLE, Exo-Force, and Ninjago. These sorts of themes carried me through my teenage years, when many AFOLs might have experienced a dark age. And while some of these were a part of the overextension the article mentions, that didn't make them any less enjoyable for me growing up. Certainly The LEGO Group was already on a path towards these kinds of themes in 90s, which had a number of themes with rudimentary stories (Adventurers having perhaps the most developed of these). But today, with the LEGO Group on steadier financial footing, some of that post-LSW experience (including missteps like Galidor) has been invaluable in helping them to create themes like Ninjago which really knock the ball out of the park from the very beginning. Share this post Link to post Share on other sites
Bobskink Posted May 29, 2013 WOW! This is interesting. I like to point out that Jar jar binks killed star wars and the ripple of this was felt by LEGO. So that begins said jar jar binks is the one that almost killed LEGO. That is probably also a very funny, but non the less, correct point. Share this post Link to post Share on other sites