does its block as rival adds to woes, by Rupert Widdicome
1st May 2004
The Sydney Morning Herald)
The past 10 years have been cruel to Lego, the Danish
toy company. There was once a time when its plastic-studded
bricks were a part of every childhood. But in the
age of Game Boy, Xbox, web chat, texting and fast-burning
fads such as Pokemon, Lego has struggled to cut it
with generations of increasingly sophisticated young
1998, for the first time, the company made a loss.
The following year, 1000 people were laid off, another
first. In January Lego posted a loss of 1.4 billion
kroner ($312 million). A few weeks ago a further 500
jobs were cut.
if this was not enough, Lego is challenging a Canadian-based
rival, Mega Bloks, in the Canadian Supreme Court for
cutting into its market for colorful building blocks.
claims it has trademark rights over the interlocking
mini-bricks, even though its patents expired in 1988.
Mega Bloks, which launched its Micro blocks in 1991,
is now Canada's biggest toy maker and has about a
quarter of construction toy sales in North America.
is not that Lego - whose iconic brick was judged the
toy of the century in 2000 by the British Association
of Toy Retailers and the US business magazines Fortune
and Forbes - has not tried to move with the times.
Toy store shelves feature dozens of new Lego products
that bear little resemblance to the familiar sets
there are licences in kit form: Harry Potter, Bob
the Builder and Winnie the Pooh. There have been successful
home-grown innovations, too - Clikits for girls and
programmable bricks called Mindstorms, as popular
with adults as kids.
biggest of the recent hits, and No. 1 Lego product
last year, is an action figure range called Bionicles,
which first appeared in virtual form on the web in
December 2000. Today, the epic struggle between Toa
heroes and Makuta villains features in comics and
books, on the web, in CD-ROMs and movies, as well
as in millions of snap-together kits. Bionicle accounted
for roughly a quarter of Lego's turnover last year.
the Bionicle idea was proposed in 2000 there was resistance
from company traditionalists. "The correct term
for what we encountered is scepticism," says
Lars Kaae, marketing manager on Bionicle. The characters'
warlike appearance ran up against the company's values:
an emphasis on free play and encouraging the imagination,
and no modern warfare or violence.
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