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Lego Is The Biggest Toy Company In The World

It does one thing, but does it beautifully. And that's how the Danish company unseated Mattel to become No. 1.

Lego is officially the world's most profitable toy company, finally topping Mattel this quarter. For the ninth year in a row, the company has broken its own sales records. But how did a Danish company, headquartered in a small town of barely 6,000 people, become such a superstar?

Partly, it's a question of materials. Lego, though it has since branched out into digital products and even movies, has long relied on simple, cheap plastic. The Guardian notes that its raw material costs only a dollar per kilogram, but its sets, which are nothing more than molded and dyed plastic, sell for more than $75 per kilogram. But there's more to it than that.

Lego has, against all odds, kept its core product, the little Lego man, relevant but still respectable. The company has made some brilliant partnerships with major media brands, from Harry Potter to Batman to Star Wars, to make the Lego videogames series. The games are shockingly fun; it's hard to believe that games based on Harry Potter but starring Lego-fied versions of the characters can score a whopping 87 on Metacritic, but they have. The games, made by the studio Traveller's Tales, manage to walk a whole bunch of fine lines: the line between games for kids and games for adults, between nostalgia and modernity, and between playing on love for a brand and being a shill for it.

Anyone who was surprised that The Lego Movie became a critical and commercial smash probably hasn't been paying attention to Lego lately; that quirky but non-pandering sense of humor, self-referential fun, and sense of innocence but not simplicity have been hallmarks of Lego's media work for years now, from games right up to the movie. "The brightly imagined Lego Movie is a wickedly smart and funny free-for-all, and sassy enough to shoot well-aimed darts at corporate branding," wrote Rolling Stone's Peter Travers in a review.

This all boils down to having a singular vision of the brand; Mattel, the Microsoft to Lego's Apple, makes pretty much anything it can, from Hot Wheels to Barbies to WWE figurines to something called Monster High. It's not necessarily a bad strategy; Mattel tries anything, some of it works, some of it doesn't. But it makes for a different kind of company. When you buy Lego, you know what you're getting; there's a tone, a level of quality, a certain message that remains consistent. When you buy Mattel, there's none of that; you're not buying a Mattel product, you're buying a Barbie or Hot Wheels or whatever else. The message is clear when you go to Mattel's site: The first thing you see is a message that reads, "Find great deals on all your favorite brands!" With Lego, there's only one brand: Lego.

[H/T The Guardian]

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  • A great insight into how Lego has become what they are can be found in 'Brick by Brick' by David Robertson with Bill Breen. It's a fascinating case-study of innovating in-the-box, and also how Lego almost blew it, by trying to diversify too much.

  • The important thing for many small businesses to note is that they have remained true to their core product even though they have tried different markets. Many small businesses are tempted to grow too quickly and to branch out into many products or services and in the process stray away from the true values and goal of their company.