The Energon Pub

http://money.msn.com/business-news/article.aspx?feed=OBR&date=20131003&id=16963084

Lego, which has overtaken Hasbro Inc and is now behind only Barbie maker Mattel Inc in terms of sales, also boosted its share of the global toy market to about 8.8 percent from 8.6 percent at the end of 2012.

I'm betting Kre-O and Construct-Bots might be sticking around longer to help Hasbro get back on top to regain their #2 spot.

In 13 years Lego went from near bankruptcy to the number 2 toymaker, that's just incredible.

Seibertron user sabrblade has pointed us towards an article on MSN Money, illustrating the rise of the Danish LEGO group as second-largest toy company behind Mattel, effectively moving Hasbro further down the list. The article, found here, and in another variation here, only mentions Hasbro and Mattel once, focusing almost exclusively on LEGO. Does this shift shed more light on the company's high-focus on ConstructBots and Kre-O? Or do you think the two are not connected? Discuss your thoughts in the Energon Pub!

MSN Money wrote:Lego, which has overtaken Hasbro Inc and is now behind only Barbie maker Mattel Inc in terms of sales, also boosted its share of the global toy market to about 8.8 percent from 8.6 percent at the end of 2012.

Bloomberg wrote:Lego’s first-half sales were higher than those of Hasbro Inc. (HAS) The Pawtucket, Rhode Island-based toymaker reported sales of $1.43 billion for the same six-month period on July 22. Mattel Inc. (MAT), the world’s largest toymaker which is based in El Segundo, California, on July 17 reported a 4 percent advance in first half revenue to $2.16 billion.

I'm not surprised LEGO are doing so well. They've got the licenses to nearly every major character based IP and they charge a stupid amount of money for even the smallest sets.

Lego products are really good.

I know some people complain about the recent shift to factories in China and how the quality went down, but I honestly can't physically feel it.

Though, lego is too expensive, and take up too much space on display.
Used to collect lego before collecting TFs though.

Yes Legos are more expensive and all the branding is getting a little absurd. But you can't really argue with the quality. Transformers and Legos are my only real obsessions and I gotta tell you, Kre-o just doesn't cut it. They're cool yes, fun yes. But the set design is no where near the quality of Lego. Of course it's all about the bricks since the idea is to take everything apart and do what you want, but there Lego comes out on top as well, the Kre-o bricks themselves are much lower quality. Are Legos too expensive? Yeah they are, and they rarely go on sale or clearance. But it's still the Mercedes of building blocks and it shows. Hasbro tried with Kre-o to imitate, and some people buy them for the brand representation, but no one seems to be buying them for the bricks since they just don't stack up (pun intended).

I think this is really about branding and planning. Lego has a product that appeals on a brand level, but if you're like me even if you could care less about the brands you still want the sets because of the pieces that they have. Case and point, Ninjago and the Lone Ranger sets. I could care less about the brands but I still grabbed plenty of them because of all the different elements in those sets. To a Lego modeler there's some valuable stuff there. So for Lego even their less popular stuff will sell and mostly at full retail price.

Now hasbro on the other hand, (speaking strictly as a Transformers fan who cares nothing for the other lines) if you don't like the brand/line/character then you're not getting it and thus we have seemingly acres of dark of the moon/bot-shots/prime figures clogging up retail space not even getting sold at clearance prices STILL sitting in stores, and I'm pretty confident construct-o-bots will join that bunch soon. Then retailers see this stuff not selling and are hesitant to stock up on other products, some of which actually are highly desirable like generations or masterpiece.

But lets keep this in perspective, number three in the world is still pretty good. I think they just need to stay focused and stop this crap of non-transforming vinyl figures etc. Seriously, who thought that was a good idea?

Gavinfuzzy, LEGO doesn't have factories in China.

I'm actually pretty surprised that Lego hasn't always been the bigger company. I have never paid any attention to the business side of toys, so I just judge by what people I know are into and what aisle I see kids in in the stores, and those both point to Lego being more popular, which I would have equated with being more profitable.

I can't say I'm too concerned either way, since I love Legos, but I hope Hasbro isn't focusing on the Kreo and Contruct-bot stuff to try and keep up with Lego on their own turf. They will absolutely lose that fight.

Manterax Prime wrote:Gavinfuzzy, LEGO doesn't have factories in China.

In fact, Lego doesn't even come close to Eastern Asia. It's all done in Denmark, Hungary and Mexico, with an additional plant in the Czech Republic focusing on packaging and decorations alone.

And yes, it is surprising to hear this, but The Lego Group has been at the brink of bankruptcy at least once somewhere in the late 1990's. The move to extend the brand to other areas, acquiring licenses of multimedia properties plus bring fans on board the company has brought the company back.

JelZe GoldRabbit wrote:

Manterax Prime wrote:Gavinfuzzy, LEGO doesn't have factories in China.

In fact, Lego doesn't even come close to Eastern Asia. It's all done in Denmark, Hungary and Mexico, with an additional plant in the Czech Republic focusing on packaging and decorations alone.

Yes JelZe, I know. They put it on every package.
Also, I knew about LEGO topping Hasbro last month (or august) as the LEGO forums caught wind of it quickly.

Well, when you have an entire toy aisle (and even FULL STORES) chock full of expensive but popular products...

I see Kre-O/Construct-Bots is an attempt to compete with Lego, but it clearly has a loooooooong way to go. Lego is in literally every toy store ever, and even has retail stores all it's own, and practically monopolizes profitable IPs. Kre-O, on the other hand, is lucky to get a tiny sliver of a shelf outside of a TRU, and barely has any IPs to work with (the best chances are the ones Hasbro owns entirely). Construct-(A/O?)-Bots are even worse off than that, being limited to just TFs for now and seemingly taking up space in the regular TF aisle.

And of course, Lego is a household name, makes all sorts of TV shows/specials, video games, regularly makes large 'statues' for publicity, has a theatrical movie coming out...

Manterax Prime wrote:

JelZe GoldRabbit wrote:

Manterax Prime wrote:Gavinfuzzy, LEGO doesn't have factories in China.

In fact, Lego doesn't even come close to Eastern Asia. It's all done in Denmark, Hungary and Mexico, with an additional plant in the Czech Republic focusing on packaging and decorations alone.

Yes JelZe, I know. They put it on every package.
Also, I knew about LEGO topping Hasbro last month (or august) as the LEGO forums caught wind of it quickly.

That wasn't towards to you, Manterax. Just adding info for those who don't know.

maybe its because lego knows what its doing where as hasbro does not. Lego has continued to put out quality products and now they have a huge amount of licensed sets (all extremely popular brand names as well) then throw in they cater to everyeone not just one or two demographics so this doesnt surprise me at all. And lets not forget you get what you pay for, you spend $100 you get $100 quality unlike hasbro where you spend $150 & get $50 worth of quality. If i had the room & money id still be collecting legos. And no one is ever going to bring down mattel they have two of the most iconic brands under them & they've been around forever. But i really hope this isnt what hasbro is pushing constructobots cause that would just be a stupid idea. If you get surpassed by another company you dont try & copy their product you make yours better. But it would explain why we have overpriced bionicle transformers now.

Where's the outcry from Legoheads worldwide on how Hasbro ripped off Lego's "IP" to design Kreo ???

Or maybe theyre not such a sensitive bunch and dont give a s**t...

Lego vs Kre-o, My take on it is the Plastic that Kre-o uses on their Kreons is not as good as Lego's plastic. Or it could be that the area of the wrist on the Kreons might need to have bigger holes for the hand post to fit into the arms to keep from cracking or splitting them and getting the white stress marks it seems to have on every figure. This is a very bad problem and everyone that has been collecting the Transformers Kreons know this. Hasbro, please take a look to fixing this and start doing sets that people want, like Jurassic Park, The Wizard of OZ, Aliens Movies,and so on.

**(One big question to Hasbro / Kre-o )" Where is the *Micro-Changers for the main G1 figures like Megatron, Optimus Prime , Bumblebee, Jazz, Ultra Magnus, and so on? We have the Kreons, but NOT the Micro changers dang-it ! ????
Seems that you have skipped doing them in Micro-Changers and going on. Thanks!

njb902 wrote:In 13 years Lego went from near bankruptcy to the number 2 toymaker, that's just incredible.

And all it took was licensing of other franchises.

But how about profit wise? Who's number one then?

Rated X wrote:Where's the outcry from Legoheads worldwide on how Hasbro ripped off Lego's "IP" to design Kreo ???

Or maybe theyre not such a sensitive bunch and dont give a s**t...

Lego lost patent on interlocking Building blocks many years ago.

Lego is a brand name within the Interlocking Building Blocks toy family, just like Transformers is a brand name within the converting robot toy family.

Megatron Wolf wrote:maybe its because lego knows what its doing where as hasbro does not.

I think Hasbro know what they're doing.

They're two different companies. Let's face it, Lego hasn't done anything ground-breaking for a long time. They developed the brick and then made said brick into various shapes and licensed a bunch of other brands.

They were on the verge of bankruptcy, only through licensing of other brands have they been able to turn things around.

Hasbro is much more diverse. They develop their own brands, new designs, new "gimmicks".

I'm a fan of both but their business models are vastly different.

Burn wrote:

Megatron Wolf wrote:maybe its because lego knows what its doing where as hasbro does not.

I think Hasbro know what they're doing.

They're two different companies. Let's face it, Lego hasn't done anything ground-breaking for a long time. They developed the brick and then made said brick into various shapes and licensed a bunch of other brands.

They were on the verge of bankruptcy, only through licensing of other brands have they been able to turn things around.

Hasbro is much more diverse. They develop their own brands, new designs, new "gimmicks".

I'm a fan of both but their business models are vastly different.

Star Wars literally saved Lego as it is.

Rated X wrote:Where's the outcry from Legoheads worldwide on how Hasbro ripped off Lego's "IP" to design Kreo ???

I don't think Lego has any room to complain about others ripping off the whole brick design...

Burn wrote:Hasbro is much more diverse. They develop their own brands, new designs, new "gimmicks".

Hasbro isn't completely innocent. Their 500+ versions of Monopoly under different licenses attest to that

Mkall wrote:

Burn wrote:Hasbro is much more diverse. They develop their own brands, new designs, new "gimmicks".

Hasbro isn't completely innocent. Their 500+ versions of Monopoly under different licenses attest to that

Yes well ... they do know how to go overboard on that one.

JelZe GoldRabbit wrote:

Manterax Prime wrote:

JelZe GoldRabbit wrote:

Manterax Prime wrote:Gavinfuzzy, LEGO doesn't have factories in China.

In fact, Lego doesn't even come close to Eastern Asia. It's all done in Denmark, Hungary and Mexico, with an additional plant in the Czech Republic focusing on packaging and decorations alone.

Yes JelZe, I know. They put it on every package.
Also, I knew about LEGO topping Hasbro last month (or august) as the LEGO forums caught wind of it quickly.

That wasn't towards to you, Manterax. Just adding info for those who don't know.

that surprised me too. I know Lego only has Euro based factories/factory(?)

This news doesn't surprise me. It goes along with my warnings of how a Optimus/BB fetish will affect your bottom line, and how putting crap on shelves isn't a small faux pas. Or, to put it more succinctly, if you don't keep your eye on the ball (closely)...

But let's be honest here: we are 1 TF movie away from Hasbro regaining #2. Cause seriously, their profits JUMP on movie years - the bigger issue to discuss is what the F*CK Hasbro is doing with the TF brand during NON-MOVIE YEARS!

I've said before and I'll say it again: relying on movies to sell your products is a terrible plan. Hasbro is one big movie flop away from seeing some dire financial consequences for this foolhardy strategy. As many analysts have said, the TF movie franchise WILL COOL OFF. And when it does, let's face it: Hasbro does NOT have a good strategy to handle the brand.

But hey, they could always bribe Bay to do a 5th movie, right guys?! RIGHT?!?!

Since when is Mexico in Europe? I'm assuming Mexico handles all the North America stuff.