Lego sticks to bricks, despite apps, games and flicks

Thu Mar 10, 2016 8:38am EST
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By Sabina Zawadzki

BILLUND, Denmark (Reuters) - In a low-rise factory on the outskirts of Billund, a small town in western Denmark, robots stand holding trays at the ready as pistons spit out hundreds of pieces of Lego every few seconds.

The plant churns out 100 million of the brightly colored plastic bricks every day and is set to increase output this year, in line with Lego's ambitions to dominate the global toy market.

    The Danish company could overtake Barbie doll maker Mattel as the world's biggest toymaker in 2016, analysts say, helped by its push into movie franchises, video games and smartphone applications.

    Most of its 25 box-set themes now have some digital content: Nexo Knights, introduced last year for example, comes with an app game.

Yet, while Lego has embraced the digital age as more kids play games on iPads and smartphones, parents who fret their children spend too much time staring at screens shouldn't worry: online is not the toymaker's ultimate destination.

Rather, its digital push is aimed at bringing children back to its core product: the Lego brick, first produced in its current form in 1958.

The driving force is extrovert, quirky CEO Jorgen Vig Knudstorp, appointed in 2004, a year after the company flirted with bankruptcy, and the first chief executive from outside the Kristiansen clan, Denmark's richest family.

He set about reviving Lego's core business, by firing consultants and hiring new designers to come up with higher-margin products that were up to date but still looked like Lego, an abbreviation of the Danish "leg godt", meaning "play well".   Continued...

Lego bricks are pictured in a production line at the factory of Danish toy company Lego in Billund, March 1, 2016.  REUTERS/Fabian Bimmer/Files