LEGO Dominates the Toy Industry – But Why?

Image via Global Toy News

Lego dominates the toy aisle. The toy industry’s Big 3, Lego, Hasbro, and Mattel, are starting to look like the Big 1. That domination is the subject of an excellent article by Wall Street Journal writer, Trefor Moss, entitled “How Lego Beat Barbie and Monopoly.”

He puts it this way:

Less than a decade ago, Lego inched ahead of Barbie maker Mattel Inc. as the world’s biggest toy company. Today, the maker of those brightly colored bricks is generating almost twice the revenue of Mattel, outpacing both it and rival Hasbro

“HOW LEGO BEAT BARBIE AND MONOPOLY,” TREFOR MOSS, WALL STREET JOURNAL, MARCH 7, 2023

Lego’s soaring growth (revenue up 17%) comes at a time when the toy industry’s public companies are struggling. As of Friday’s close, Hasbro stock was down 43% year over year. Mattel was down 25%, Funko was down 49%, and Spin Master was down 20%.

But why do people continue to buy those little plastic bricks? I love Lego and recognize its play power. But let’s face it; there are already 400 billion Lego bricks in the world. According to Deyan Georgiev’s article, “15 Curious LEGO Facts To Know in 2023,” that is the equivalent of 86 Lego bricks for everyone in the world. He says that a retailer somewhere in the world is selling seven Lego sets every minute.

Okay, I get that Lego is one of the most fantastic toys ever created. I get that they are fun and educational for everyone in the family. But isn’t that enough? If there are 400 billion bricks in the world, why do people keep purchasing new ones?

I’ve thought about it, and here is what I think makes the difference:

• The Kristiansen family, which has run Lego for four generations, must have Lego bricks floating in their DNA.
• Lego loves to produce licensed versions of its sets. Everything from Star Wars to Harry Potter to even Seinfeld has had its own Mini Figures, and fans love Lego for it.
• Lego has embraced the Chinese consumer market and reaped copious benefits.
• Lego is recognized as a world leader in brand value. Lego has consistently ranked Number 1 on the Global RepTrak 100, beating out brands like Walt Disney, Rolex, Nike, and 96 other runners-up.
• Lego has long embraced the adult fan.
• Lego has successfully utilized other platforms like video gaming and movies to expand its fan base.

Of course, the real reason is probably something beyond a mere human’s ability to calculate. Its just a great toy and probably the greatest in history.