In ten years, Lego has recovered from the brink of bankruptcy to a blockbuster movie and strong sales. Lego Designer Mark Stafford recently took to Reddit to offer some insight on what went wrong in the first place and how the Danish toy company turned it around. The troubles, he said, involved bad management and expensive and unpopular new products. The LEGO company at that stage had no idea how much it cost to manufacture the majority of their bricks, they had no idea how much certain sets made. The most shocking finding was about sets that included the LEGO micro-motor and fiber-optic kits — in both cases it cost LEGO more to source these parts then the whole set was being sold for — everyone of these sets was a massive loss leader and no one actually knew. This was combined with a decision to ‘retire’ a large number of the LEGO Designers who had created the sets from the late 70′s through the 80′s and into the 90′s and replace them with 30 ‘innovators’ who were the top graduates from the best design colleges around Europe.
Unfortunately, though great designers they knew little specifically about toy design and less about LEGO building. The number of parts climbed rapidly from 6000 to over 12,000 causing a nightmare of logistics and storage and a huge amount of infrastructure expansion for no gain in sales. Products like Znap, Primo, Scala and worst; Galidor all came out of this period. Let’s take a closer look at those new products that almost led to disaster. Lego Technic Fiber Optic Multi Set (1996) The “fiber optics” in this this Technic kit are actually clear plastic tubes that connect to a battery-operated LED-light pack. These specialized parts cost more to produce than the entire set was being sold for. The Znap line was an obvious reaction to K’Nex, an American construction toy company that was founded in 1993. Like those of K’Nex, Znap pieces were more elaborate than traditional Lego bricks, and could allow for more architectural creations, like bridges. Ultimately, Znap proved to be an inferior competitor and failed to catch on.
To make matters worse, Lego even used those highly unprofitable Technic motors in some of the sets. Lego’s Duplo line is intended for children 1-5 years old and has been around since 1975 (barring a couple brief absences). The Primo offshoot was intended for babies too young to even play with regular Duplo bricks. And unlike Duplo pieces, they were not compatible with regular Lego pieces. Primo was succeeded by Lego Baby, which was phased out in 2005. The niche market was simply not profitable for the company. For some reason, Lego decided to revive an obscure line from ’79 targeted at young girls. The one thing that kept the Scala doll line remotely attached to the Lego brand was the use of some bricks in the play sets, and from ’97-’98, the brick studs were in flower-shapes incompatible with other Lego sets. Stafford considers the Galidor line to be Lego’s most heinous offense. Based on a kid’s show of the same name, the line was basically an action figure series with awkward features like interchangeable arms for characters.
Each set in the line featured specialized pieces, which were expensive to produce and in practically no way resembled a Lego product. Jorgen Vig Knudstorp, a former McKinsey consultant, came in as CEO in 2004 and rescued the company. He tossed series that were wasting money, cut the number of Lego pieces by more than half, and began hiring talented designers who were also passionate fans of the brand (like Stafford), rather than just smart people with impressive degrees. The company continued to grow the success of the massively popular Bionicle line, as well as licensed series spearheaded by “Star Wars” sets. Now, designers like Stafford produce successful kits like those in “Legends of Chima,” which combine original storytelling with the classic Lego “feel.” For more information on every Lego series — both the good and bad — check out Brickipedia.LEGO Marvel Super Heroes Release Date: Oct 22, 2013 Publisher: Warner Brothers Games LEGO Marvel Super Heroes features an original story crossing all the Marvel families.
Players take control of Iron Man, Spider-Man, The Hulk, Captain America, Wolverine and many more Marvel characters as they try to stop Loki and a host of other Marvel villains from assembling a Super weapon which they could use to control the Earth. Players will chase down Comic Bricks as they travel across a LEGO New York and visit key locations from the Marvel universe.Lego sets come in all different sizes with different numbers of Lego pieces. Of course bigger sets cost more, but is there a linear relationship between set size and cost? Let’s take a look. Oh, and yes – I did look at this before, but that was a long time ago. It’s time to revisit the data. It’s not too difficult to find data for Lego prices and number of pieces. If you just look on the Lego online store. There you can find both the price and the number of pieces for each set. You can even sort them by “themes” – like “Star Wars” or “friends” Even though it’s easy to get, I only collected price data for a subset of the themes (mostly because I am lazy).
If I put all of this data together, I can get a plot of the set price vs. number of pieces in set. Here is what that looks like. Let’s look at the linear function that fits this data. The slope of this line is 0.104 US Dollars per Lego piece. There is your answer. On average, one Lego piece costs 10.4 cents. Also, I think it’s nice to notice that this data is fairly linear.What about the y-intercept for this fitting function? The value from the fit is 7.34 USD. That means that for this function, if you had a Lego set with zero pieces in it, it would still cost $7.34 – you know, for the box and instructions and stuff. Yes, I know that there are Lego sets cheaper than $7.34 – this is just the y-intercept for the fitting function. Now let me point out the three outliers in this plot. Notice that all of these (one from Duplo and two from the City theme) are train sets. Of course train sets are going to be more expensive than a set with the same number of pieces (but not a train) because of the electric motors and stuff.
If you are looking for a “good deal”, might I suggest the Trevi Fountain (21020). This set has 731 pieces for just $49.99. According to the fitting function, a set with this many pieces should cost about 83 dollars. Suppose I break all the data into the different themes. If I fit a linear function to each of the different themes, I can get both the price per piece of Lego and the price of a zero piece set. Here are the brick prices for some of the Lego themes. The error bars are the uncertainties in the fit parameters. If you know what a Duplo block is, you probably aren’t surprised that they are the most expensive (63 cents per brick). These are bricks created for smaller kids. They are all large so that you can’t swallow them. It just makes since that they would cost more. The other expensive bricks are the City sets. But this is deceiving due to the high set prices of the train kits. I suspect if you removed these train sets from the plot, it would be a more normal price.