Lego looks to digital future as sales surge
Danish firm looks to appeal to new generation of tech-savvy children
Lego is looking to build on strong sales of its traditional toys by focusing on digital games after the firm revealed the highest sales in its 85-year history.
Chief executive Bali Padda said: “This year we have strengthened our efforts around digital engagement, and found new ways to connect with children online and through a range of digital platforms.”
It is seen as a quintessentially traditional building toy, but now Lego has revealed plans to drive traffic to its digital games and activities as it revealed the highest sales in its 85-year history.
The Danish group’s accounts showed that revenue reached £4.4 billion (37.9 bn Danish Krone) in 2016 – 6 per cent higher than the previous 12 months, driven by strong sales of Lego themed sets including Lego City, Friends and Ninjago.
However, the company said it wanted to increasingly “blend” digital and physical play to appeal to a new generation of digitally-connected children.
The firm said that Lego Life, an online platform to encourage children to share their building experiences, was released in selected markets in February.
Meanwhile, Lego Boost, which combines coding and traditional building, will be launched in the second half of 2017.
The company’s British chief executive, Bali Padda, the first non-dane to run the business – said: “Innovation is critical to our success and each year around 60 per cent of our portfolio is new products. We are constantly challenging ourselves to engage and inspire children with the most relevant, exciting and fun play experiences.
“This year we have strengthened our efforts around digital engagement, and found new ways to connect with children online and through a range of digital platforms.”
During 2016, Lego said that more than 355 new items were launched, including Lego Nexo Knights, a platform that combines digital and physical play.
Sales showed strong growth in the UK and other European markets, but a significant increase in marketing spend did not lift revenues in the US.
Marguerite Hunter Blair, chief executive of Play Scotland, said: “If you can use the digital element with children who are digitally engaged to reinvigorate the manual and physical use of Lego, and the creativity that unlocks, then that’s great.
“It would be very disappointing if the company sees its future as taking Lego digitally. There are a limited number of toys which give you the opportunity to create thing the way Lego does and foster the handeye coordination.”
She added: “However, I would understand that a company which is always trying to increase its profit margin is looking to see how they can tap further into the digital market without losing its main powerbase.”
Worldwide, Lego sold more than 75 billion parts, 3,700 shapes and launched 335 new sets last year.
“Innovation is critical to our success and each year around 60 per cent of our portfolio is new products”
BALI PADDA