How Legos went from humble toy to criminal black market item fueled by LA heists

These days, Lego encompasses a sprawling, multibillion-dollar ecosystem of toys, video games, retail stores, television shows, films, amusement parks and more.

It’s easy to forget the days when children designed their own spaceships and castles out of a stew of mismatched blocks spilled on the living room shag.

Or that even more recently, Lego Group, a Danish company founded in 1932, appeared in jeopardy.

According to David C. Robertson, author of the Lego history“Brick by Brick,” the company foundered in the late 1990s as it made ill-fated attempts to enter the digital space. By 2003, he said, things were dire for Lego, which released its first“Automatic Binding Brick” in 1949 and has since produced so many billions of pieces that a good portion of humanity has felt the pain of stepping on one barefoot.

“It is really hard to overstate how close they were to bankruptcy,” said Robertson, noting that Lego Group had even discussed an acquisition by rival Mattel. “They were convinced for a while that the alternative was liquidation.”

But the company course corrected by getting back to basics — and understanding it needed “to innovate around the brick,” he said. That largely came in the form of storytelling.

“They had to create worlds and characters,” said Robertson, a senior lecturer at the MIT Sloan School of Management. “They had to tell those stories with things outside the box: comic books, young adult fiction, movies, apps and ties to other [companies’] intellectual property, like ‘Batman’ and ‘Star Wars.’”

It worked. To some Gen Xers’ disdain, children were no longer content building their own creations out of the same bucket of bricks. They wanted new, evermore costly kits — and the hobby became far more expensive.

The turnaround is apparent in the company’s financials: Lego Group’s revenue in 2023 was $9.65 billion, up about 74% from five years earlier, according to Dow Jones data.

Some of the company’s biggest successes in recent years have been entertainment offerings tied to existing intellectual property, such as the “Lego Batman Movie,” which grossed $312 million worldwide, and Fox’s Emmy Award-nominated competition TV show “Lego Masters.”

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