Lego Obtains Batman License — What Are They Thinking?

It was just five years ago that LEGO was in serious financial troubles. One of the major problems then was licensed products — LEGO sells a lot of licensed products such as Harry Potter, Star Wars, Spider-Man, but it also shells out a ton of money to those licensees. Add to that the general trend in juniorization of its products and its focus on more traditional toy markets over the plastic brick business and LEGO looked a lot like a company that had lost focus.

Five years later, and apparently not much has changed. At the end of October it won the Batman and Sponge Bob Square Pants licenses. Hmmm…maybe they’ve overcome their financial problems and found a way to return to profitability where these licenses make sense.

Not exactly. In January 2004, Lego announced its worst one-year loss in its 72-year history. The cause of the huge loss? Licensed products,

Lego, the Danish children’s toy manufacturer, looks set to announce its third-ever loss this year after its chief operating officer said Star Wars and Harry Potter products had a disappointing 12 months.

LEGO’s line, repeated in The Daily Telegraph, is that kids simply grow up quicker and stop playing with plastic bricks. Certainly this is a real issue, but Lego has done almost nothing to address it.

First, its emphasis on licensed products makes Legos appear to kids and adults as simplified model building kits. Buy the Lego kit to build the Millenium Falcon or whatever the model is and that’s that.

Second, the licensing costs mean that Legos are ridiculously overpriced. A few months ago I bought a Batman playset on clearance at Toys-R-Us for $18. It originally retailed for $49. A Lego playset half that size will like cost close to $100. Every time I go into the local toy store, there are dozens of the Spider-Man kits on clearance and are overpriced even with steep discounts.

Third, Lego waited far to long to embrace the online Lego building community until recently. For years there were third party Lego building software, but Lego only finally got around to releasing its own version this year. And, casual users might be shocked at just how expensive it can be to purchase some of those custom models due to the way that Lego manages its inventory (there are ways around this, but its something that users shouldn’t have to worry about, period).

One thought on “Lego Obtains Batman License — What Are They Thinking?”

Leave a Reply