Mega Bloks + Kre-o as one company = bad news for TLG?

[AmperZand]

According to the BBC ( http://www.bbc.co.uk/news/business-35496381 ) and other news channels, Mega Bloks' owners Mattel are in merger talks with Kre-o's owners Hasbro. Would a single Mattel-Hasbro be bad news for TLG?

Mega Bloks has always made low quality products while Kre-o has been pretty decent quality but badly designed (have you seen their minifigures?). Together, they could be OK quality and design and therefore more of a threat to TLG.

What do you think?

Apologies if this should have been in the Community forum. As it concerns TLG, I thought that it would be alright in General. Please move it if it isn't.

[Umbra-Manis]

I don't think this deal would get through regulators.

If it did, it might cost TLG their title as world's largest brand, but it probably wouldn't have a noticeable impact, unless they really step up their game in both categories.

[geezerman402]

The better the competition from other companies, the better for us!

[Actor Builder]

The better the competition from other companies, the better for us!

So true. Capitalism at it's finest. If LEGO has greater competition, they will put their resources into making even better products, in order to stay better than the off-brands.

[xboxtravis7992]

I don't know if the merger of Mega and Kreo would create a huge competitor for Lego. Lego dominates toy aisles in the western world; with Megablocks sort of sitting on the corner of the shelf. Mega does have brands which if they were designed better could be a serious threat to Lego. Take Halo for example. I don't buy Megablock's Halo sets due to their bad design and quality; however if the quality was the same as Lego's I would reconsider. Add to that the fact Halo sets come with in game Req Packs which add unlockable traits, weapons, and vehicles; to Halo 5's game play. Being an owner of Halo 5 the thought of a free Req Pack sounds very interesting. So if Mega's products were better I would really consider those Halo toys... (Some less "purist" AFOL's such as Jangbricks already seem to be buying Mega's Halo and Call of Duty sets)

And then Kreo has a few other licenses as well; especially of note those based on other Hasbro products. (Imagine had Lego Star Wars not happened in 1999 we probably would have Kreo Star Wars instead due to Hasbro's relation to Lucasfilm ) Unlike Megablocks though; I rarely have seen Kreo on toy shelves other than a few Star Trek products.

So as stands; I don't feel Kreo or Mega are strong competitors to Lego; but they have potential to be. A merger could either be depending on how its handled 1) more of the same or 2) a real game changer in the world of construction toys. And as mentioned, Lego might improve if they no longer feel like they are the king of the hill anymore...

[dr_spock]

It's one less competitor. Generally having more competitors is better for consumer pricing.

[Lego Dino 500]

I doubt they'll pose a threat. They're not dedicated building toy brands which value quality, value, or any effort into designing their sets, they're toy brands, and that's all they'll be. Heck, Hasbro hasn't even updated Kre-o or made any new sets. They're still listing and posting the same sets from 4+ years ago. They actually outsource their bricks from chinese clone brands, many of which use discarded or cast Lego molds to make subpar bricks that don't even fit together. The one part I am annoyed about is Hasbro buying Wizards of the Coast, which means we'll never get decent Dungeons and Dragons building sets. Outside of the stray Transformers set, I've never actually seen Kre-o in the wild. If anything, it'll drive Lego to make better sets, get more licenses, and make more profits. Lego actually has brand name power, while everything else dies out or goes to the fringes of society.

[geezerman402]

^^ That would only be true if the competitor was a decent threat. Megablocks is definitely starting to be, so maybe the companies joining would improve it.

Edited February 5, 2016 by geezerman402

[mediumsnowman]

Nah, I don't think TLG has much to worry about. Bad company + bad company = worse company!

[retrotaco]

LEGO has sooooooooooooooo much name-brand recognition as well, no one really cares about Mega Bloks or Kre-O or K'Nex (they still make those?) they just go straight to LEGO.

[MAB]

Mega Bloks has always made low quality products

No they haven't. Some of their parts these days are on par with lego's, and that's ignoring lego parts that regularly crack (cheese slopes).

[Dorayaki]

I would say they do respectively have very strong licenses, and some like Barbie and Transformers are even exclusive to them. The smart thing they know is to ultilize their other toy brands into a brick theme (excpet My Little Pony which is my favorite ).

But still my main concern about them is not having a unified scale of figure or brick system. It sucks that Monster High and Barbie are even not compatible. So their merging generally do nothing good to their existed licenses unless they plan to have a big revolution.

If we haven't confirmed LEGO Disney CMF series, I think there is also a good chance for Mattel+Hasbro to take over Disney brick toys just like their doll line. I agree that the competitors can drive LEGO do go stronger in either their other licenses or original franchises. But the possible bad news is that we might see more Spongebob/TMNT cases.

Edited February 5, 2016 by Dorayaki

[dulsi]

A merger between the two companies probably means nothing. This is a merger between Hasbro and Mattel not Mega Bloks and Kre-o. Mega Bloks and Kre-o are just along for the ride. It will probably lead to lot of confusion and dysfunction for some time. If the combined company put more focus and money into building block toys that might make a difference but I don't see that happening. This is two giant companies not making enough profit to satisfy the stock market. They are looking to make themselves look good to the stock market again.

[HawkLord]

The reality is "no". Granted, Hasbro has Star Wars, Marvel, and Transformers, while Mattel has DC and Ghostbusters in the action figure arena, they wouldn't really be able to move those to a brick format. And that's really where the threat would be. On their own, neither company has licenses that people care about as much as the licenses that Lego has and that's really the primary battle, as neither Kre-O or Mega Bloks really has their own IPs that people would care about.

Plus, Hasbro and Mattel have been the big names battling in the toy aisle, why would they join forces now? And could they even come to an agreement on it all? I doubt it.

Edited February 5, 2016 by HawkLord

[Lyichir]

In all likelihood, "Kre-O" would probably cease to exist and future Hasbro licenses would be given to Mega Bloks in the event of such a merger. But even then, it probably doesn't make much of a difference to Lego whether they're competing with one larger sub-par brand or two smaller ones. The biggest difference would probably be that Mega Bloks would earn more clout to use when negotiating licenses (since it'd be a larger brand with more products to its name), but even so, I doubt it'd make much of an impact in Lego's dominance of the building toy market.

[Markalus]

Will they be a threat? Highly unlikely given the market/ licensing and brand loyalty that Lego enjoys. Having said that I do get sick of so-called Lego purists who dismiss all Mega bloks as poor quality. I've made several of their Call of Duty Collector series sets and I've got to say the quality of those particular sets is very good. Anecdotally this does appear to be the exception though. They actually do some things better IMO eg. multicolored elements, matt (ie. not shiny) elements and a massive inventory of useful parts that I wish Lego would make like studded slopes, double sided studded slopes and more variety of odd stud length plates and bricks. I build a lot of Lego models but some of the techniques and connections used to construct the Mega Bloks sets are unique and suprised me in a good way.

[Andy D]

Stronger competition = Better products for all

Just MHO, YMMV

Andy D

[rodiziorobs]

IIRC, they tried something like this years ago and it never came together. I doubt this will, either.

If it does, I don't expect that it will really impact TLG much at all. Practically every other toy line would evolve but as far as building toys, no. TLG has the market share, the brand recognition, the licenses, the business savvy, and creative minds on board--and immense customer loyalty--to ensure its success regardless of what any other toy company is doing.

Edited February 5, 2016 by rodiziorobs

[LAKAbricks]

Unless the possible new company is going to change strategy for bricks and expand the product palette considerably, I do not see it should be a big competitor to LEGO.

As I see the present product ranges there is a quite narrow focus on (licenced) action themes. Some if these probably have a large fan base, but I do not see it as being enough. LEGO offers so much more, including own brands that are big sellers (Friends, Ninjago...).

Besides that I guess (my own personal assumption) more people are (hardcore) LEGO fans than fans of other brands. I think, either you are a LEGO fan or you are a brick fan with no particular brand preferences (generally spoken).

I grew up with LEGO (and being a Dane) and I do not find any themes from neither Mega Bloks or Kre-O attracting me, so most likely, I would personally never buy bricks from a competitor.

[danth]

There's only one Lego.

[HawkLord]

So, I was just reading that this brick system merger is based on a rumor going around that Hasbro and Mattel themselves are merging. As in, the whole company and not just any brick system sub-genres. Not sure there's a whole lot to it, but major action figure sites are reporting it.

[retrotaco]

If I remember correctly, this isn't the first time these two companies have tried to/had rumors about merging - they're gonna be challenged on grounds of a monopoly if it did happen, I'd imagine, as they're the two of the biggest toy companies out there, and definitely the two biggest action figure companies - it'd be like Pepsi and Coca Cola merging.

If it DOES happen however, I imagine that, like some other people already noted, that the more profitable of the two would continue while the other (I'd imagine Kre-O) would be discontinued and their licenses would transfer to Mega Bloks.

We'll see...but either way, I imagine LEGO is untouchable in the market.