Why Lego Is So Expensive | So Expensive | Business Insider

Summary

The script explores the evolution of Lego from a simple children's toy to a high-value collector's item and investment, driven by innovation, adult fandom, and strategic business shifts. It delves into Lego's history, the rise of adult fans (AFOLs), the impact of the secondary market, and how Lego adapted its products to cater to an adult audience, leading to financial success and a resilient, creative community.

Takeaways

• 🔍 Lego thefts have increased, with some cases involving substantial amounts, such as a theft totaling around $300,000.
• 💰 The high cost of some Lego sets, which can exceed the price of an iPhone 15, may be a motivating factor for thefts.
• 🛍️ Resale markets like eBay have seen original Lego sets' prices skyrocket, with some selling for several thousand dollars.
• 🏚️ Some Lego enthusiasts have dedicated rooms filled with their collections, which can be worth tens of thousands of dollars.
• ⚙️ Lego's history began with wooden toys and transitioned to plastic bricks in 1949, influenced by early plastic brick patents from Kiddicraft.
• 🧩 The 'System in Play' philosophy introduced in 1955 emphasized that every Lego brick should fit together and be durable for creative building across generations.
• 📈 Lego's sales slumped in the late 1990s due to diversification into non-brick products and a loss of focus on their core building sets.
• 🎖️ The success of licensed sets like 'Star Wars' helped Lego recover, and these sets became increasingly important for the company's strategy.
• 👥 The Adult Fan of Lego (AFOL) community has been significant in Lego's resurgence, with many adults finding joy and a creative outlet in building Lego sets.
• 🌐 The internet has played a crucial role in connecting Lego fans, fostering a community and transforming Lego from a children's toy to a shared adult hobby.
• 🎁 Lego's strategy to embrace its adult fans, release complex and expensive sets, and acquire the resale marketplace BrickLink has been key to its financial success and cultural impact.

Q & A

What is the current situation regarding Lego thefts mentioned in the script?

The script mentions a recent Lego theft where a thief stole Lego sets worth $1,500 according to the store owner. It also highlights a significant increase in Lego thefts over the past decade, including one instance totaling about $300,000.

Why might thieves be targeting Lego sets?

One reason suggested in the script is the high value of some Lego sets, with the most expensive sets costing more than an iPhone 15, making them a potentially lucrative target for thieves.

How has the value of Lego sets changed over time?

The script indicates that in 2006, Lego's most expensive set was priced at $270, but sets have since increased in value, with some selling for several thousand dollars on platforms like eBay.

What was Lego's original product before plastic bricks?

Lego started with wooden toys before transitioning to plastic bricks in 1949, which was a cutting-edge technology at the time.

What is the significance of the 'System in Play' in Lego's history?

The 'System in Play' was Lego's guiding philosophy that every brick should fit together and stand the test of time, allowing for unlimited building possibilities across all ages.

How did Lego innovate its brick design in 1958?

In 1958, Lego perfected its bricks with the stud and tube method, an interlocking design that enabled large yet stable builds and is still used for Lego bricks today.

What was Lego's situation in the late 1990s?

By the late 1990s, Lego was facing a decline in sales and was losing money for the first time ever. The company had spread itself too thin, investing in theme parks and media properties while neglecting its core brick product.

What is an AFOL and how did the internet impact this community?

An AFOL stands for Adult Fan of Lego. The internet allowed AFOLs to connect with each other, share their passion, and realize they were not alone in their hobby, which helped transform Lego into more than just a children's toy.

How did Lego's approach to adult fans change over time?

Initially, Lego did not see value in its adult fans and focused on children. However, recognizing the importance of this customer base, Lego began to embrace AFOLs, collaborate with them, and develop products targeting adults.

What is the significance of Lego's 18+ sets?

Lego's 18+ sets, first released in 2020, are designed to clearly target adults with more complex builds and themes, marking a strategic move to cater to an older demographic and expand the company's market.

How has Lego's pricing strategy evolved?

While Lego sets have become more expensive over the years, the price per piece has remained relatively stable when adjusted for inflation. The increase in set prices aligns with an increase in complexity and the number of pieces per set.

What is the role of creativity and problem-solving in Lego building?

Creativity and problem-solving are central to the Lego experience, as builders are encouraged to find solutions and create new techniques with the pieces they have, rather than relying on having an unlimited supply.