Monday Musings #8: Does LEGO need the competition to step up?

January 24, 2022 | 5

Welcome to the first Monday Musings of 2022- a regular(ish) series devoted to random musings on the LEGO hobby, community, my collection and beyond.

Today’s post is about competition and whether LEGO needs their competition to step up.

In case you missed it, Monday Musings can be long-form, or short bursts of whatever strikes my fancy, and be more traditional “blog-type” content.

Here are the links to my previous posts:

• #1 Having to limit the LEGO themes you collect
• #2 Is LEGO a good investment?
• #3 Does LEGO listen to their fans?
• #4 What kind of LEGO fan are you?
• #5 LEGO Leaks ruin the fan experience
• #6: Buy your LEGO early ahead of the 2021 holiday season
• Monday Musings #7: How LEGO made nearly a billion dollars in the first half of 2021

Who are the competition?

In the toy industry, it’s often considered that LEGO has no “true” competitors – mostly due to LEGO’s perceived quality and continued dominance over other building block companies.

Superior quality aside, something that you’re not going to have many arguments about, LEGO have also gone where most toy companies don’t go, successfully transition from a product primarily aimed at children, to bona fide adult collectiblex.

With competitors, you’ll often have brands like Mattel’s Mega Bloks/Mega Construx, Germany’s Playmobil, and Japan’s Nanoblock. You’ll get a few sneers when mentioning Mega Bloks which are widely considered inferior, but they’ve done decently well grabbing intellectual property (IP) such as Call of Duty, World of Warcraft and Halo which LEGO have passed over.

And then there are clone brands – an area I don’t fully understand, as there’s a wide spectrum, from China-based brands that straight up copy LEGO and fan designs, to more legit brands like Qman (formerly Enlighten) who has managed to snag the official license for Pokemon and Doraemon.

But in terms of total dominance, it’s hard to argue that any of these brands pose any real competition to LEGO, even if they do have fairly distinct niches or pockets of loyal communities.

LEGO’s real existential threats

There’s a reason you see LEGO continue to fumble around their efforts to bridge the physical and digital play divide (a larger piece I’m working on), with themes such as the recently cancelled Vidiyo – and it’s because The LEGO Group are terrified of video games.

In the attention economy, LEGO have identified video games, especially PC and console gaming as the biggest threats to its business, as they threaten to lure kids and tweens away from their construction and building blocks when they leave childhood.

It’s one of the main reasons LEGO started LEGO Con last year, as an attempt to keep kids and kids engaged with the brand, lest they get draw further into the digital realm by Fortnite, Minecraft, Pokemon, Valorant or whatever games are trending.

LEGO does have a bit of a foothold here, through their series of LEGO games, such as the upcoming LEGO Star Wars: The Skywalker Saga, and the ever-popular LEGO Minecraft theme, which they use to maintain their connection with Minecraft fans, but at the same time is also a bloody cool theme.

Gaming is only getting bigger, and with Microsoft’s recent acquisition of Activision-Blizzard for 70 BILLION dollars, with the industry only set to grow as more and more of our lives become more digital, and computing power continues to grow.

Adult Collectibles flank LEGO

On the other side of the equation, something that LEGO is a fairly new entrant in is the world of adult collectibles, where brands like Hasbro’s Black Series and Hot Toys have a big foothold in the ultra-pricey adult collectibles market.

Here, we see LEGO taking cues from Hasbro’s line of Star Wars Helmets, and LEGO continuing the push up the value chain, with their LEGO for Adults/18+ line to appeal to adults with deep pockets.

Pokemon cards, the true masters of collecting, has been on a tear recently, thanks to the antics of Logan Paul on Youtube, and also all things nostalgia becoming cool again.

Even Hot Wheels has seen a huge resurgence in the last few years, following the same formula as LEGO – internet communities forming around the hobby, and very clever use of licenses such as Fast & Furious, Mario Kart, and Tesla to keep things fresh.

Mattel are doing some really smart stuff with Hot Wheels, and you can see LEGO start to take learnings from stuff like Hot Wheels Red Line Club (RLC), a paid subscription service that gives you exclusive access to rare hot wheels, vote on upcoming products.

If it sounds suspiciously familiar to the rumoured paid subscription service that LEGO has been gathering feedback on, you couldn’t be faulted to think that LEGO has been looking at Mattel’s success with the Hot Wheels RLC, and finding things they can replicate for their own paid service.

(exclusive minifigures and product customisation – you heard it here first)

LEGO needs competition to thrive

I would like to see more competition to LEGO. Whether that’s in the traditional building block industry, or from other adjacent categories.

Competition is a good thing, because consumers and fans ultimately benefit as companies up their game to vie for our hard-earned dollars.

LEGO’s complete dominance is not so much of a good thing, as they’re virtually unchallenged in the construction toy space, and in many ways, can survive huge (and costly) missteps like Vidiyo, and Hidden Side, as there are no competitors to capitalise on these failed ventures.

More competition could also help drive prices to more competitive levels, and spur increased innovation – something you see a lot in the tech world, but not to much in toys.

More nimble competitors could mean LEGO being quicker to release products, breaking away from their typical 2-year product development cycle, and also leverage their intellectual property (IP) partners better.

That said, LEGO have video games to reckon with, and you’ll be damn sure they’ll be gearing up to take another shot in the digital space… but after Vidiyo, what will come next?

I hope to finish up a lengthier piece on LEGO’s digital future, so keep an eye out for that!

What do you think of LEGO’s longstanding dominance in the toy industry? Would you like to see competitors step up? Do you know of any examples where competitors do things better than LEGO?

Thanks for reading!

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