Nick Stanley: New life for Lego

By NICK STANLEY

Chances are, if you've been anywhere near children in the past 25 years you would have come across the knobbled building bricks with the name Lego printed on the protrusions. Kids have been assembling the bricks into anything from cars to spaceships since Lego hit the toystores here during the 60s.

From its inception in the carpentry shop of Dane Ole Kirk Christiansen in 1932, Lego has sought to provide toys that would stimulate kids' creativity and imagination while they play (the name itself comes from the Danish words "Leg godt" meaning "play well").

For many years Lego's building toys were solely a specialty of Denmark, and until the end of the Second World War the toys were still being made of wood. That changed with the introduction of plastic, and soon Europe and the wider world began playing with the sets of moulded building bricks.

Today the company, run by Ole Kirk's grandson, Kjeld Krik, estimates that 68 million children around the world have Lego in their houses and they spend 5 billion hours a year playing with the toys. On the back of that popularity and the nature of the toys themselves, Lego was named "Toy of the Century" by both Fortune Magazine and the British Association of Toy Retailers.

But despite its ubiquitous nature, not all is rosy in Legoland. Last year Lego announced an $NZ288 million loss on the back of what the company said was a very weak market for "traditional" toys. It seemed the ever-growing popularity of new technology-based games was threatening Lego with a life at the bottom of the toybox.

The crumbling fortunes of some other 20th-century construction toys, such as Meccano, Erector Set and Tinker Toys, can't have been lost on the Danish company. It had always been a market leader when it came to developing new toys and, to survive, Lego had learned it must evolve or perish.

During the late 90s Lego began coupling the basic building system with some of the new computer technologies on offer. In 1998, they introduced Mindstorms a system that enables kids to build their own robots, complete with their own programmable microcomputer.

In the past year, Lego has been teaming up with some of the biggest names in the technology and entertainment industries. With Steven Spielberg it has released a set for making home movies, complete with a buildable brick plug-and-play camera and editing software.

Two new titles in its Creator range — which, in conjunction with the Lego internet site, enables kids to play on and off-screen — bear the biggest name in children's entertainment: Harry Potter.

Now, Lego has announced an alliance with Microsoft. Lego will develop content for the MSN network and games for the Xbox gaming machine Microsoft aims to release later this year. Lego will use Microsoft's technology in its products and websites and Microsoft is banking on Lego's worldwide recognition to help its business.

This year Lego anticipates turning last year's loss into a $115 million profit. By 2005 the company wants to become the strongest brand among families with children. Only time will tell if the toy of last century will have a constructive future in this one.

* Peter Sinclair is on leave


Links


Official Lego website

Ole Kirk Christiansen

Fortune Magazine

British Association of Toy Retailers

Legoland

Meccano

Erector Set

Tinker Toys

Mindstorms

Steven Spielberg / Dreamworks

Harry Potter

MSN

Xbox