As a parent of a 5-year old, I am in the middle of the toddler toy wars. If you didn’t realize it, a battle rages between Lego, Playmobil, and others on a smaller scale but yet not unlike the battle between Nokia and Apple or between Oracle and Google. From what I can gather, it looks like Lego may be the Apple or Google of the 5-year old boy market segment.
Doing a little research for this article, I found a few interesting numbers to compare the toy manufacturers of my son’s current favorites – in particular I was comparing action figures for 3-5 year olds (at least products that are primarily targeted to them):
- Lego: US$3.3B revenue with US$740M in profit (2011)
- Playmobil: US$670M revenue (2011)
- Fisher Price: US$1.35B revenue (2010)
It is astounding to me that Lego is nearly 3x bigger than Fisher Price. Especially since they were on the verge of bankruptcy in 2004! I don’t have access to the article yet but, Harvard Business Review had already written about this remarkable turnaround in 2009.
The latest astounding victory of Lego seems to be the launch of Ninjago in January 2011. I wrote about my kid’s obsession with Ninjago a little while back, but have kept thinking about it since then. For the uninitiated, there is apparently an animated series featuring these Lego-ninja characters which ride on tops and battle each other. There are of course the spinning tops with the action figures, dragons, training houses, card games, iPad games, and other paraphenalia already out there. The interesting thing I noticed is that they seem to have stolen a page from Apple’s marketing book with respect to the character Kai. All the kids around the same age as mine (and in multiple countries according to friends and internet contacts) have been waiting for the Kai personality to come out. He isn’t any more special than Cole (who is black) or Jay (who is blue) except that he is red. Oh, he does have a dragon though. Anyway, the Lego associated with him has been talked about and even publicized in Lego catalogs for months (perhaps as long as 14 months but I have only been aware since about November) but unavailable for sale from any outlets. So, it appears that, like Apple with the iPhone, Lego pre-announced Kai but kept the figurines in very short supply. The first ones hit the store last Wednesday in an apparent frenzy (at least here in Paris). Fortunately, my son is still in the dark on this as we are trying to teach him the virtue of patience. Inevitably, we bought one and are holding in on standby for some occasion (his 5th birthday just passed in early February). It is also curious that the whole ninja concept still holds such fascination for kids (in my time, it was Bruce Lee and the generation after me had the Ninja Turtles) and has been so well commercially reborn and exploited by Lego over the last year or so. My kid knows all of the stories around how the Sensei trained the Ninjagos in the sacred art of Spinjistu to fight against the skeletons of the evil Samukai. And this is despite the fact that, other than the action figures and tops, we have no books or DVDs about Ninjago at all. There is clearly a lesson to be learned here in terms of marketing and hype.
Lego seems to have cornered the market through clever marketing of concepts like the aforementioned Ninjago, but also through their innovative use of their Star Wars license. They also have a chain of attraction parks, one of which a friend in London goes to twice a year (I plan on making the trek this year). I somehow missed the Lego store at Disney Village in January but it was most likely closed at the late hour I was there for dinner.
[Side comment: It is also incredible how the smaller Scandinavian countries have created such lasting global brands with universal recognition and in many cases market dominance: Denmark with Lego and B&O, Sweden with IKEA and Tetrapack (and to a lesser degree Scania and Volvo), Finland with Metso Paper and (at least until recently) Nokia, and Norway with Stokke.]
In comparison, US-based Fisher Price (in the massive Mattel group) is marketed towards younger kids and is definitely less popular among kids here in France. The German Playmobil (part of the Brandstätter Group holding company) has decent success here owning to the complete universes that they sell. My kid went through a prolonged pirate phase and thus we have the prototypical Playmobil pirate ship. Like Lego, they also have a smaller scale indoor themepark, one of which is here in the Parisian suburbs. Yet, even at the height of his “pirate period”, my kid was never even close to as excited or informed about his toys than with Ninjago.
Will Playmobil or Fisher Price come up with a home run product to knock Lego out of their dominant position? It is hard to say, but for the moment, my money is still on Lego.