(Aug 28): Lego A/S is on the hunt for new digital partnerships, following the success of its Fortnite venture with Epic Games, which already reached 83 million people since the introduction, according to the toymaker’s chief executive officer.
Lego needs to stay relevant for its users, which “are increasingly present digitally” to ensure they will continue to engage with the Lego brand decades down the line, Niels B Christiansen said in an interview.
With Lego Fortnite, the Danish company is trying to fend off competition from its two main rivals — Mattel Inc and Hasbro Inc — after both US companies enjoyed great success with recent ventures outside the world of physical toys. Hasbro’s app version of the board game Monopoly has become one of the top mobile games of all time, grossing billions of dollars in revenue, while Mattel’s Barbie movie was one of 2023’s biggest hits.
“We will continue to develop in the digital world,” the Lego CEO said. “It’s not new for the Lego group to do partnerships and licence agreements, and it’s clearly our ambition that we will do more.”
Lego has been involved in video games since the 1990s but with varied fortunes. Lego Universe, a multiplayer online game launched in 2010 at great cost and with much fanfare, was shut down in 2012 after it failed to generate enough revenue. Meanwhile, Lego has had more success with its licensed games, including those built around the Batman, Star Wars and the Harry Potter universes.
The maker of colourful toy bricks on Wednesday said operating profit for the first six months of the year jumped 26% to a record 8.10 billion kroner (US$1.21 billion or RM5.26 billion). Consumer sales grew 14% at a time when the overall market is struggling to expand. Neither Hasbro nor Mattel reported rising sales in the same period, underlining that the Danish company currently has the upper hand.
Lego Fortnite, which was introduced in December, has been pegged as a competitor to Microsoft Corp’s Minecraft and offers children a new way of playing the third-person shooter game by designing villages and focusing on long-term survival.
Lego has already introduced several updates, including a Star Wars version in May, the CEO said, adding that the game will continue to expand. In October, Lego Fortnite miniature figures will go on sale, he said.
“Even though it’s a digital game, we also want to give our users the opportunity to make their own physical play around it,” the CEO said.
Lego is controlled by the third and fourth generations of the billionaire Kirk Kristiansen family. Kjeld Kirk Kristiansen has a net worth of about US$8.1 billion, according to the Bloomberg Billionaires Index, making him one of the richest people in his native Denmark.
The family’s holding company, Kirkbi, in 2022 invested US$1 billion in Epic Games, setting the scene for the current partnership. While Lego’s deal with the video game maker didn’t come until later, Christiansen said it had been a natural development.
“When you enter into a partnership of this size and create a game the size of Lego Fortnite, it’s a big bet,” he said. “But we also think it’s relevant in the longer term for the Lego group to be positioned here.”
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