Of all the things I could wake up to, a press release about LEGO buying Bricklink certainly wasn’t something that ranked very highly on that list, but here we are.
I had to do a double take to ensure that it wasn’t a poorly timed April Fool’s joke.
This is a really ground-breaking announcement and the impact of this move by LEGO to muscle in on one of the most important aspects of AFOL-culture cannot be understated enough.
For the unaware, Bricklink can be considered the lifeblood of the LEGO fan community. It’s a robust marketplace of spare parts, loose minifigures, used sets, and is probably responsible for 99% of all creations at LEGO fan conventions.
It’s even got an affectionate nickname – Cracklink, due to its addictive nature. I know this for a fact, as I’ve spent a fair chunk of change on Bricklink buying minifigures, and so, so many farm animals.
I’m mostly supportive of most of LEGO’s decisions, but this one feels like a stinker to me. Allow me to elaborate.
In business, you learn about something called core competency, which basically means do what you’re good at to make plenty of money.
This is why companies like Apple keeps (mostly) to smart devices/computing, and Shell sticks to drilling oil from the earth. Shell absolutely has the resources to do other things like create a fashion label, or their own TVs but don’t because they stick to what they’re good at, which is often determined by the company’s legacy, DNA and heritage.
LEGO has no business owning Bricklink, and I’m not convinced that there will be improvements.
LEGO’s core competencies are – design, supply chain and logistics, and creating lifelong memories for children and their toys.
Anything web-related isn’t really LEGO’s strong suite, especially when it comes to running a marketplace, which you would notice, is now in (kinda) direct competition with LEGO’s core business.
I look at LEGO’s track record when it comes to anything online – Rebrick, Lego Life, and even their rollout of the new VIP portal, it’s spotty at best.
Running a marketplace is a whole other ballgame, and I can’t exactly predict what LEGO’s end-game is. Do they merge Bricklink’s functionality with Pick-A-Brick, or Bricks & Pieces? Do they plan to shutter it completely after purging it off “grey market” sellers?
Look, Bricklink isn’t exactly clean and it’s clear a lot of parts get there from questionable sources. There’s no way that one seller from Taiwan or the Czech Republic parted out hundreds of sets to individually sell that rare minifigure in the hundreds.
I can totally see a mass migration of sellers to a non-LEGO owned marketplace like BrickOwl, which I think are the biggest winners here.
It could be a data play? Bricklink has a wealth of data about AFOL purchase behaviour, so I feel like that’s the most valuable part of the acquisition to some of the data boffins in Billund.
I don’t know – this feels like LEGO has crossed a proverbial line into the fan territory and I’m not too comfortable with this. What next, will LEGO start acquiring Fan Conventions? Brickset?
In the business world, acquisitions happen for a number of reasons, most commonly:
- to remove a competitor & gain market share
- acquire intellectual property/talent
- access an existing community of customers
- break into a new market without having to start from scratch
- a new revenue stream.
Looking at what Bricklink has to offer, I’d say it’s 1, 3, and 4. I don’t know if Bricklink is that profitable, so the jury is out on 5.
This is just an odd move, and I cannot think of any example where any other company out there has made a move like this and turned it into a success.
I feel like LEGO has more important things that they can and should focus on that are their core competencies, and I may be assured once I understand what their roadmap/future plans for Bricklink are.
For now, I’m pretty concerned and not too happy about this decision.
What do you think of this announcement? Let me know in the comments.
BILLUND, Denmark, November 26, 2019: The LEGO® Group today announced it has acquired BrickLink Ltd (www.bricklink.com), the world’s largest online community of adult LEGO fans from NXMH to strengthen its connection with its important adult fan base.
The BrickLink platform has more than one million members and comprises an online marketplace of more than 10,000 stores from 70 countries; a digital building software where builders can design and showcase their creations; and a vibrant online community where fans share ideas and builds.
The platform was founded in 2000 by Dan Jezek as a way to connect like-minded adult LEGO fans from around the world. It was acquired in 2013 by NXMH, which is owned by Korean entrepreneur Jung-Ju “Jay” Kim. BrickLink is headquartered in Irvine, California.
The LEGO Group CEO, Niels B Christiansen said: “Our adult fans are extremely important to us. They are passionate, committed and endlessly creative. We have worked closely with the community for many years and look forward to deepening our collaboration. We plan to continue to support BrickLink’s active marketplace and evolve the digital studio which allows our talented fans to take their creativity to the next level.”
Jung-Ju “Jay” Kim, owner of NXMH,said: “It has been a privilege to lead the transformation of BrickLink during the past six years. I am grateful to the community for being so welcoming, supportive and constructive. I am constantly amazed by everyone’s endless creativity and their love for building. I am confident the platform will be in good hands with the LEGO Group. As a fan myself, I can’t wait to see what’s next.”
The LEGO Group’s Chief Marketing Officer, Julia Goldin, said: “BrickLink provides the LEGO Group with a unique opportunity to connect with adult fans through new channels and exciting experiences. We’ve recently collaborated with BrickLink on a range of crowd-sourced sets to celebrate the 60th anniversary of the brick. We learned a lot and are keen to explore more ways of working together to create value. We look forward to collaborating further with our adult fans, while retaining and nurturing the independent spirit of the digital platform.”
The acquisition also includes Sohobricks which makes small batches of building elements.
Financial terms of the acquisition were not disclosed. Closing is expected to occur before the end of 2019.