Why is LEGO so expensive? – Geek Review

Lego businessman minifigure carrying money in a wheelbarrow.

LEGO is one of the most popular toys of all time. Chances are you had a set as a kid and even have a few bricks lying around as an adult. It’s a simple system that offers an almost unlimited number of possibilities, but there’s a downside: LEGO is quite expensive.

This popularity hasn’t waned, although LEGO has a higher price tag than similar systems, like Mattel’s Mega Bloks. On average, retailers sell seven LEGO sets every second around the world, and they sell enough bricks a year to go around the world five times.

There is also some logic behind the price. Although part of it is the profit margin, a LEGO brick goes further than you think. Factors related to the brick itself, the environment, and the characters walking around your creations all play a role.

Let’s take a detailed look at why your LEGO bricks can cost mega dollars.

Big brands have a higher price

Photograph of the Lego shop window in Trinity Shopping Centre, Leeds.  UK
James Copeland/Shutterstock.com

As we mentioned, LEGO is one of the most popular toys that ever existed and is the most popular building toy – a category that includes, but is not limited to, LEGO clones. Being popular and having a good reputation allows companies to charge a premium. Just as a Nike or Levi’s logo can make a garment more expensive, the word LEGO stamped on a plastic brick will drive up the price.

The LEGO brand has even extended beyond the brick. Video games and movies featuring original LEGO characters or established characters with a LEGO twist have done well at charts and box offices in recent years, as have collaborations with fashion brands. While the storylines and gameplay features on offer are interesting enough on their own, the adventure exemplifies the appeal of the LEGO brand as a whole.

Quality has a price

LEGO manufactures its products from several different types of plastic. The company manufactures standard bricks from acrylonitrile butadiene styrene (ABS), a hard, durable plastic well suited to the demands of brickwork. The ABS produces a durable toy and the plastic works with the injection molding process that LEGO uses to make said bricks.

Lots of colorful rainbow toy bricks background.  Educational toy for children.

Other materials used include high impact polystyrene for the base plates, polypropylene for the accessories and thermoplastic polyester for the transparent parts. The company lists 12 types of plastic currently used in their lineup.

The machines making the bricks have tolerances as small as 10 micrometers (0.01 m). These tight tolerances ensure a good fit and a stable connection between two bricks. Although other brands design their products to “fit” LEGO, they probably won’t connect as well due to tighter tolerances and high standard LEGO sets.

The plastic used may not be of the same quality either. Growing up, I had LEGO sets with alternate sets from other manufacturers. I clearly remember that the plastic in the off-brand sets looked and felt cheaper than the actual LEGO bricks.

The bricks are still in development

Bundle of Lego toy blocks made of aluminum foil thrown by the sea among sand and seashells.  Editorial image of trash in water.

Research costs money and LEGO is constantly developing new products. LEGO releases an average of over 850 sets per year. According to the company’s 2020 annual report, new products account for 55% of the portfolio each year. Each of these products required research, testing and, in some cases, the development of specialized machine parts before reaching the market. The report also states that LEGO spends more than $138 million a year on research and development.

The company isn’t just focused on developing new sets; LEGO is even redeveloping the bricks themselves. LEGO has focused on the environment after recognizing that a high percentage of the billions of LEGO bricks will still be around hundreds of years from now. Since then, the company has developed bricks made from sustainable materials like sugar cane, bricks made from recycled plastic bottles and pledged to say goodbye to single-use plastic packaging by 2025.

LEGO has also pledged to invest more than $400 million over three years in its “Learning Through Play” initiative, reducing carbon emissions and replacing plastic packaging with paper .

Licenses increase costs

Lego Stormtroopers giving Harry Potter a gift for the 20th anniversary of the publication of the Harry Potter book.

If your urge to build things overlaps your passion for something like Star Wars or Harry Potter, chances are you’ve come across a licensed LEGO set at some point. The Danish toy company has acquired the rights to produce sets based on several film and TV franchises over the years, and those rights aren’t free.

The exact numbers for each license agreement will vary but will likely include a flat fee and royalty on each licensed set sold. In 2020, LEGO spent approximately $500 million on “licensing and royalty expenses.” LEGO doesn’t take these expenses on its chin; they pass the costs on to the consumer.

It’s cheaper than before

A price chart of LEGO parts over the years
Overview of bricks

Though they seem to cost a small fortune, the company’s mainline “System” line pieces are only a fraction of their 1970s price. Other pieces, like LEGO Minifigs, cost around half that. what they cost in the 1960s, despite skyrocketing prices over the past two years.

More expensive sets are available, with some costing several hundred dollars. However, these sets contain thousands of individual parts. The LEGO Millennium Falcon set is one of the most expensive on the market, costing just under $800 new; the set contains 7541 pieces, so you pay 10.6 cents per piece, despite the fact that it is a complex and licensed set. Although relatively new, the huge and expensive sets represent only a small fraction of the more than 850 LEGO releases each year. The average price of a set has also decreased over time.

So here we are. A lot of things go into a LEGO brick, from materials to brand licensing. Manufacturers have still managed to lower prices despite massively increasing variety, acquiring all sorts of licenses, developing their brand and maintaining quality standards. They also seem to be doing their part to improve the environment and the lives of disadvantaged people.

Yes, LEGO is expensive, but when you look at where the money goes, it’s worth it.

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