Monday, February 16, 2009

Lego Picks up Disney License

From Brother's Brick I stumbled onto this link below their Toy Fair pics.

My very first thought was, "How much of this will be Duplo?", specifically, I was concerned that Cars would be exclusive to Duplo as Thomas the Train was a few years ago.

Sure enough, reading through the article on the other side of the link, we find that Cars is exclusive to Duplo. While Toy Story have a mix of System and Duplo and Prince of Persia will be exclusive to System.

But as I think on it, I guess I'd rather not have dozens of the same car design with different Nascar and sponsor stickers. Still, I'd love to see some medium sized sets of Lightning, Mater, and some of the other characters. Would you buy a large helicopter primarily made of medium/light blue bricks? I think I would.

The sets from the three movies are slated for a 2010 release. So 2010 will be a huge year of licensed products for Lego. Unless, the current crop of licensed products is over. For instance, I've seen no new product pics for Speed Racer, Ferari, or Sponge Bob. So maybe Lego will only be producing an equal dose of licensed products from year to year. Which is good. Because a few years ago they clearly had too many licensed products with little to no return on the investment.

I might try to pick up a Buzz Lightyear mini fig from the System sets, but I'm not sure I'll bother with anything from the other Disney items.

One has to wonder if Lego might have actually wanted the Halo license. Maybe the profit margin was too small, maybe it was too violent or dark, maybe they were never offered. Oh well. At least we have Lego Space.

Toy Fair Stuff

Well, all of the high traffic Lego blogs and websites and photo hubs are sharing the Lego goodies from this year's New York Toy Fair.

It looks like the year will continue to be good for Lego. The early year release of the farm and construction city sets are already a hit. So is most of rest of the early year releases. But the summer releases look just as good, if not better. I even want to get my hands on the upcoming city sets although I am primarily a Lego Space fan.

I think the thing that struck me most is that I no longer look at the new Space Police line as a must have. In my earlier posts I lamented that the Space sets are mostly white again, for the third year running.

As much as I dislike lime, I am starting to believe that I would rather have a Space series with lime and trans purple rather than more white.

Oh well, I'll buy some anyways, the sets look good in spite of the white.

The city sets are really nice. Lots of trucks and even a detailed camper.

It is important to remember that when fans began to complain about the release of police and fire sets year after year that Lego responded. Unfortunately it takes up to three years or more to get an idea from design to shelf. So, here we are. We wanted more "life" sets, and now we're getting them. By this theory, next year's Lego Space line should be even better.

Saturday, February 7, 2009

Mega Bloks Wins Halo

The Brother's Brick was tipped off that Lego's number one competitor has won the license for Halo. Right away comments began rolling in about how it's no big deal and that no one is going to buy the sets.

I followed the link found in the comments and took a look at the sets and the first thought that came to me was, "Why couldn't these have been made by Lego?"

Which got me to thinking about the brand loyalty I've been adhering to all these years. Granted, Mega Bloks was initially just a cheap and poorly produced version of Lego. But over the years they have created an identity of their own. Their models are more realistic and detailed, the brick density in their sets is greater, and often their product looks much more fun than Lego. From my experiences with Mega Bloks, the only real quality difference seems to be that the bricks are softer. Some people have reported that the softness is an issue when constructing detailed MOCs. Also, while I am a huge fan of their highly detailed minifigs, I do not like that the gear is molded onto the figs rather than included as an accessory. This means that if you buy a pirate or Halo minifig from Mega Bloks, it will always be a pirate or Halo minifig. There is no swapping of gear or body parts to make original characters.

However, considering that many brick buyers are purchasing the license brands anyways, maybe this is not a big deal. Lego Star Wars collectors often do not take apart their sets once built, Princess Lea will always remain Princess Lea for them.

I understand the fear that some AFOLs might have that Halo, being a popular intellectual property, could take some sales from Lego. The fact that Mega Bloks even exists suggests that they actually do take some sales from Lego. How much more could they take? What if Mega Bloks had won the Star Wars license?

Halo collectors will buy the Mega Bloks Halo line. Lego builders who do not mind mixing brands will also buy Mega Bloks Halo line. Parents on a budget will buy Mega Bloks Halo for their children. Children who do not yet experience brand loyalty to toys will buy Mega Bloks Halo.

Mega Bloks does stand to make a good showing with this line. They could even force Lego to reconsider their weakening stance on violence even further.

With Lego's current quality issues, yet improving financial state, AFOLs have shown that we will buy product of a lessar quality.

The worse that could happen is that Mega Bloks will continue to gain ground and Lego will continue to drop restrictions and shed quality. Will it be enough to discourage AFOLs from continuing their hobby? I don't think so. The brand loyalty is simply too strong. Even Patrick Swayze still has fans.

My hope is that Mega Bloks will continue to improve their quality and Lego will continue to strive for the best but also cut costs. In the end, I believe the two companies will emerge on equal ground (for the most part) and people who enjoy building with plastic bricks will have more options and more parts to use.

Friday, February 6, 2009

Lego's Decade of Financial Upheaval

In 1999, Lego reported its first financial loss (experienced the previous year). I was unable to find an official financial report, but I was able to find an old news article here and here. Oddly, Lego financial report for 2002 and previous seem to be missing. I assume they are simply called something else, maybe some one else can find them. The 2005 report came up in my search but the PDF would not load.

2003

2004

2006

2007

2008 Prelim

The above links show that Lego's financial crisis that began in 1998 did not begin to really improve until 2004. From that point forward the Annual Statements begin with "It was a good year...".

From day one of Lego's financial crisis they began a policy of reconstruction for the entire company. They knew the problems: straying from the Brick, too many negative profit licenses, too much property in the form of factories, warehousing, and under-performing parks, and too many redundant people. To complicate matters even more, the cost of materials and even quality of the product was proving to be an issue.

In the years to come, Lego sold factories, sold parks, dropped licenses, slashed the work force, slashed the management, and sold warehousing.

In order to operate with less warehousing, Lego had to change how they thought about their business. Their policy became one of profit goals rather than expansion of the product into new markets. Even the basic brick line was cut so that they could use less warehousing. But the biggest change would be how they handled quality.

Colors were a huge drain on profit. The old system required far too much warehouse space. So Lego cut the color palette down to a more manageable size. They also outsourced the color production to cut costs further. Outsourcing has proven to be a blessing as well as a curse. A wider profit margin at the cost of some quality control. It was not long before bricks were found to have several shades of one color in the same package. New and more cost effective production methods added to the problem by increasing the number of "bad" parts and in some cases making them more brittle and newer bricks also appeared to have a transparency that older bricks did not have. These quality issues, among other, were not welcomed by the adult fans of Lego.

In spite of growing quality issues and fan frothing, Lego began to emerge from its dire state in 2004. Since then the company has seen a mostly steady increase in profit right up to the end of 2008. By decreasing their assets and concentrating on profit rather than expansion, Lego has managed to see improved numbers even through the current global economy crisis.

I have read recent discussions where AFOLs claim that Lego has recently seen financial difficulties over the past few years. However, the above Annual Statements simply do not support this. Lego is still restructuring the way it does business and the numbers may not be quite where they would like them to be, but their current stability is far better than it was ten years ago. I suspect information is simply being scrambled between parties. When Lugnet was blosoming, it provided a central information cache. Recent members of the community were simply not there to see things unfold and many older AFOLs may have simply forgotten some of the details so they often do not correct the bad information that is floating around. Or maybe they just don't care.

In fact, it is quite possible that there is a repository online with all of Lego's financial history, but in my research I did not come across one, which helps to illustrate the problem. The information is there somewhere, but it is not easy to find.

So, the Lego company has had a rocky decade, but they are much improved. Their recent releases suggest that the company is feeling good about its position and are now more focused on what makes Lego a profitable and enduring entity.

Good job, Lego, and may the following decades be even better.

Monday, February 2, 2009

Go MINIMAN Go Needs to Come Again

Now that The Brother's Brick has announced the winners for this contest, I couldn't help but wonder at how awesome many of the entries were.

I have seen a number of nice dioramas over the years, but the Go Miniman Go contest seems to have struck a cord within the community. Unlike many contests, this one inspired builders to produce some of the most diversely characteristic MOCs I have ever seen. By asking builders to design themes around the minifig, rather than trying to drop a minifig into a scene, a wave of unparalled creativity and skill carried the community.

I understand that this was a 30th anniversay celebration of the Lego minifig, but that doesn't mean similiar broad contests can not be initiated in the future.

Here's hoping that the Brother's Brick folks weren't too burned out by this excercize and can do something like it again soon.

Lamenting the X-Pod

I was really stoked when the X-Pods first appeared. We suddenly had odd, but useful, packaging. The large discs were a godsend and proved to be very useful over the years. When the second round was released with different colored discs and even different trans colors for the pod itself, the AFOL community collectively drooled.

As far as I can tell, these things were flying off of the shelves.

So what happened? Why did Lego change the X-Pod packaging to match the mini Racer one?

There are still a number of colors that the X-Pod series could have used, the dark colors, some of the sand colors, the metallic colors, earth tones, grays, and the discs themselves could have even been given the trans treatment.

This is just one more example of something that Lego either almost had right, or failed to continue doing right.

I'm glad we got what we did from that version of the creator line, but I sure would like to see those X-Pods make a return.

Mid-Stride Changes

I'm sure I'm not the only one.

So, there I was actually building a project I've had ongoing for a couple of months and it suddenly dawned on me that it would look better with a different color scheme.

Unfortunately one of the colors is in short supply in my collection. So, off to bricklink! I was fortunate, I was able to find almost all of the parts I needed to reproduce the MOC with the new color. Although the color itself is not new anymore, it is still a recent addition to the Lego pallet. Fortunately, it isn't TOO recent and has had a few years to accumulate lots of parts.

Sometimes a MOC just sings its color preference to you in spite of whatever design you had intended for it.