I am a founder and entrepreneur who specializes in consulting, education, and media.
LEGO, the family-owned Danish manufacturer with an unfair former monopoly on toy bricks, faces tough choices in 2020: Pesky little competitors have emerged.
It is not a matter of quality, yet. The LEGO company has superior products and more than 60 years of experience. However, it also got greedy and complacent. Today, LEGO is known for its overprized products, its sly business practices, and its army of lawyers.
The Battle for Bricks in East Asia
Meanwhile, brick brands such as Mega Bloks, Xingbao, Wange, Sluban, Sembo, Cobi, Qihui, Oxford Bricks, Global Bricks, Qman and many more pose a threat to the LEGO empire. They sell similar brick sets (some are bad, others are plagiarized, but most are awesome) with often more than twice the parts for half the price than LEGO. In addition, they create brick sets that are highly original, such as Oxford Bricks’ Ocean World or Xingbao’s Whorehouse or Mega Bloks’ Castle Grayskull or Qihui’s Storm of the Desert.
LEGO became successful largely due to European patent laws. The company secured a patent on toy bricks in the 60s that lasted until 1986. When it expired, LEGO engaged in a fierce legal battle over its renewal. Finally, in 2010, the European Court ruled against LEGO. The idea of a toy brick was, according to the judges, too universal.
LEGO Capitalism at Its Finest
But the damage was done: Europe practically invented the concepts of intellectual copyrights, patents, and exploitation, while the USA later perfected it. Capitalism. A small group of people, mostly those who came there first or who had the most resources, can legally claim ownership—be that over cars, computers, news, or toy bricks—and from then on control entire industries. The rest of humanity, 7.7 billion people today, are legally excluded.
LEGO is a text book example of last-stage capitalism because it revolves around a silly toy brick. The company produced European-styled sets, not at all diverse. The Christiansen family, who founded LEGO, grew up in post-war Europe. It refused to create war-themes, adult themes, and cultural diversity. There were no blacks or persons of color in LEGO sets. There were no guns or tanks. There were no Chinese or Russian or Indian themes.
The company was not market-orientated because it owned the market. No other company was allowed to produce toy bricks. Full stop.
Then came the revolution.
During the last ten years, lovers of toy bricks started a revolt. The price of LEGO bricks had gone through the roof, while LEGO sets—another fire brigade, another police station—became repetitive and boring.
You Must Not Sell Any Other Bricks Than LEGO
Mostly Asian entrepreneurs started to challenge the Danish imperialists. LEGO produced its toy bricks in the cheapest way possible, in Eastern Europe and in China, to make maximum profits in Europe and America. Locals could see the scam, and the words spread about the true cost of plastic bricks. Anyone could produce toy bricks for a tiny fraction of what LEGO charges, and on top of that could be free and more innovative. In addition, LEGO created artificial scarcity to obtain maximum profits and engaged in investment scams (collectors edition, limited runs, etc. when in reality the bricks were ever reused).
LEGO responded with what came to be known as LEGO politics. Hundreds of millions of bricks – because they were so cheap to produce – were shipped to political dissidents, artists, art galleries, theme parks, conventions, special events, schools, hospitals and kindergartens. Everyone who built with bricks necessarily built with LEGO. And if anyone pointed out the review scam, LEGO flared the gaslight: LEGO is unpolitical.
LEGO lawyers sued anyone in Europe who advertised or sold non-LEGO bricks. The company suddenly tried to be more diverse. African mini-figures were included in the sets. Chinese themes were thought of. A series for girls was designed. A Hollywood movie – no, two! – was made. Nothing helped. Non-LEGO bricks appeared in France, Poland, Canada, China, Japan, and South Korea. LEGO even hired “diverse” employees to posture as company that represents the world.
The Attack on Renegade Brick Sellers
Huge media campaigns took place against “fake LEGO” and “cheap Chinese imitations.” Toy distributors such as Toys R Us were coerced: Do not sell “fake” bricks. Shops were threatened: Do not showcase “illegal” bricks. Toy brick reviewers such as Held der Steine or BlueBrixx were intimidated: Do not use toy bricks in your logos, do not promote non-LEGO mini-figures. In November 2019, the LEGO Group aquired BrickLink, the world's largest second-hand online marketplace with over 10,000 shops, apparently in a bid to control all private brick businesses.
Those companies who resist LEGO supremacy deserve our respect. I would love to see the end of the LEGO tyranny for the sake of a more pluralistic world for brick toys. Sadly, LEGO in 2019 became the richest toy maker on the planet.
© 2019 Thorsten J Pattberg