Are toys going out of fAshion?
Lego’s profits have plunged, Barbie sales are down and Toys R Us has gone bust. All the signs are that the digital revolution is killing off traditional playthings
tHE slogan adorning Lego’s 1992 catalogue said it all: “We’ve got the bricks, you’ve got the ideas.” But now it seems that although the iconic toy brand still has the bricks, children are no longer quite so interested in coming up with the ideas. This week Lego reported its worst financial results in 14 years – with sales down by eight per cent and profits plummeting 17 per cent. It follows what Niels Christiansen, Lego Group CEO, described as a “challenging year”, during which the firm laid off more than 1,400 staff.
Despite the drop in sales and profits Christiansen said: “We remain committed to our mission to inspire and develop the builders of tomorrow and our ambition to reach more children with Lego experiences is more important than ever.”
Lego is not the only traditional toy firm in trouble. Mattel, maker of Barbie and Hot Wheels, reported a net loss of £197million in its last quarter, with the firm’s stock falling 44 per cent last year. Sales from Fisher-Price toys, responsible for the Bob The Builder and Dora The Explorer brands, are down 12 per cent and last week it was announced that the UK’s biggest toy retailer Toys R Us has gone into administration, putting 3,000 jobs at risk as the company closes its 106 stores nationwide.
The decline of traditional playthings has coincided with the spectacular surge in “smart toys” – from drones and racing cars to robots and “augmented reality” products, such as Pokémon Go, as well as video gaming platforms, apps, interactive watches and touchscreen toys, many of which are aimed at pre-school, or even pre-nursery children. For example, the VTech Touch & Teach Tablet (tagline: “Your little one will have a tablet of their very own”) which retails at £21.99, is described as being “best for ages 12 to 36 months”.
According to research by tech analyst Juniper, it is a trend that will only increase. It predicts annual smart-toy sales worldwide will grow from £2billion in 2015 to £8.4billion in 2020, with 224 million individual smart toys shipped worldwide last year alone. “Toys have increasingly been seen as a potential area where connectivity and existing toy types can be merged to innovate appealing new devices,” it says, adding that, despite the impressive figures, the industry is “still in its early stages of development”.
Many experts are worried that the decline of Lego, Barbie and Fisher-Price products could impact on children’s social development. Advice from the National Institute For Health And Care Excellence (Nice) is that children should spend no more than two hours in front of screens per day, with longer exposure impacting on attention span and concentration.
According to the Toy Retailers Association: “Through play children learn about the world around them and it is therefore important to understand how valuable toys and play are in the development of the child.
“Children with access to a wide range of well-selected toys are more likely to be challenged and stimulated. Studies find that they reach higher levels of intellectual development regardless of their sex, race or social class. Physical play helps them to develop agility, balance, co-ordination and fine motor skills. Playful children are happier, better adjusted, more co-operative and more popular with their peers than those who play less.”
For young children the value of physical and sensory stimulation is even more important. In her 1994 book People Under Three, Elinor Goldschmied, hailed as “one of the pioneers of early childhood care and education”, advocated the use of “heuristic play”, in which babies and toddlers are encouraged to use “treasure baskets” filled with interesting objects and textures for them to explore.
It is the same principle that took Lego from an idea by Danish carpenter Ole Kirk Christiansen in 1932 to a company that in 2015 overtook Ferrari to be named the world’s most powerful brand. Founded on the principle of “infinite play”, it has been calculated that just six standard eight-stud Lego bricks of the same colour can be combined 915,103,765 ways. But if traditional toy manufacturers are to weather the digital storm, it may be that they will have to embrace change rather than resist it.
LEGO has recently rolled out its first social network for children, Lego Life, described by the firm as “more than an app for your smart device, it’s the place for a safe and friendly community of Lego fans”. It has also launched Nexo Knights, an interactive video game where achievements are unlocked by scanning Lego pieces. “The reality is that in the past few years the growth has been supernatural,” concedes Lego marketing officer Julia Goldin.
Despite the dip in sales and profits she remains bullish about Lego’s long-term prospects. “We look at every year starting at zero because you have to recruit every child again and make the brand exciting for them. That becomes a good challenge of course.”
It may be that bricks are no longer enough after all.