Lego Builds Videogame Business
Lego, the company behind its namesake plastic block toy, is getting a significant return on an investment it made a few years ago into videogames.
The games feature plastic toy figures that re-enact classic scenes from famous films like Star Wars, Indiana Jones, and Batman. Unlike many videogames, Lego games are not violent and there is no death or destruction.
In total, nearly 14 million of the games have been sold in the US.
The first game, called Lego Island, was created by its own internal division Lego Media International and went on to sell more than 500,000 copies, reports The Globe and Mail.
Soon Lego was forced re-evaluate the practicality of running its own game studio, however. Revenues plateaued in 2003 and 2004 and the company was forced to cut costs. It ended up outsourcing a number of its licensing initiatives, including its videogame and theme park businesses.
Since then, expenses - which used to outweigh revenue - have fallen to about $1.3 billion in 2007, compared to $1.6 billion in 2003. Revenue flip-flopped the other way, increasing to about $1.6 billion in 2007 from 2003’s $1.4 billion.
In 2005, Lego expanded on its relationship with LucasFilms (it sells Lego’s brick sets based on Star Wars and Indiana Jones) by partnering with game developer TT Games to create Lego Star Wars: The Video Game, released at the same time as Star Wars Episode III: Revenge of the Sith.
Sales of Lego’s movie-themed play sets typically decline after the movie leaves theaters, but the Star Wars play set has increased by “double digit” margins since 2005 - likely due to the success of the video games, said Jill Wilfert, VP of Lego’s licensing division.