Is TLG pursuing the wrong strategy?

[Scorpion]

Comparing today's Lego catalogue with Lego's early 90's, I noticed that while nowadays Lego usually puts out some sets with many vehicles, in the early 90's the norm was loads and loads of small sets.

We've all come across this situation: "Wow, set X has a really cool Y, but it also has Z, W and V, which I don't like. X is too expensive to buy just for Y, which I would buy multiples of if it came alone..."

Is it possible Lego is hurting itself by putting out a few huge expensive sets instead of many small cheap (hopefully) ones?

Also, I wanted to make a poll, but no go, why?

Anyway, what do you think? Am I right? Am I wrong? Should I snort ABS powder? What is the capital of Botswana?

Scorpion

[Derek]

I think you're absolutely right.

Hopefully Lego will take the success of the Collectible Minifigure series and build on it. Even more so in these economic times, parents are more likely to fork over a couple bucks on impulse as opposed to a $50+ set.

7235 Police Motorcycle has been a bestseller for probably nearly 5 years now. The most recent wave of "Impulse" sets have been bestsellers since their release, same goes for the Kingdoms sets under $10.

As far as licensed sets go, here hasn't been a proper Star Wars set for $10 or less since the battlepacks were introduced in 2007. The 2006 V-Wing was the last cheap, reasonably priced set from SW, and I believe it sold well right through 2008.

I think Lego needs to work on creating small sets that combine the appeal of figures and accessories with a decent model. While they are all nice, the "Battle Pack" style sets seen in Star Wars, Indiana Jones, and most recently Toy Story and Prince of Persia, seem to rely heavily on figures and have a weak and/or parts skimpy model.

I think Lego would have tremendous success if they readjust the ratio of small to large sets released. I know it would make everyone happy, and probably be an economic success for the company.

[prateek]

I agree that Lego should make more small sets. Although the big sets are for the most part amazing, it would make Lego more accessible to a wider audience. I know for a fact that if there were more small sets, I'd have way more Lego now.

[Artanis I]

Yeah, small sets ftw. I could only ever afford small sets as a kid, and the "big" (to me at the time) sets I had were from birthday money + what I'd saved over a long period. The biggest ones I had had only 3 figures.

In reality, a "complete" theme would have a few focal points (like a base/building/fortress, & large vehicle/ship/etc) a few more medium ones (ship/vehicle/base/house/machinery/etc) and a whole heap of small ones (vehicles/ships/robots/figs/animals/etc). In the old days these came separately. Nowadays most of the small stuff is part of a large set with large or medium items (to add to the "battle-in-a-box" / playability of Lego sets). So the themes aren't really over or underbalanced, but there's a lot less "buyability" for those without the budget for the big sets (eg but not restricted to kiddies).

Keeping in mind that Lego faces more than just one buying audience (although going by the questions in the survey I filled out last year the only people that buy Lego are kids or parents buying for their kids). And how do they know who is buying what?

[MrTools]

I agree, there are a lot of expensive sets out right now that only have a few things in it i like. For example the upcoming Public transport set, could be divided up like, $20-Bus $20-tram $10 garbage truck. Instead they put it all together along with some useless structures and charge 100 bucks.

[Corvus]

Of course, the reason the big sets have the exclusive figs is because they are often what attract the eye, and help give that extra bump to buy the set.

I certainly think that we need to see some good, smaller sets. Currently, the only quality builds we have are in the large sets. SW, for example, includes models in its army builders that are really throwaways- the speeder in the ep. III clone set was crap, and is instantly dismantled. The only models I've kept from battlepacks have been the STAP and the snowtrooper speeder bike. See a pattern here?

Lego seems to be very fond of its vehicles, especially in SW. So, why don't they do this? There are plenty of nice, small vehicles in SW that would do fine on their own, yet are delegated to the large sets as fillers. It seems to me that the small vehicles can get taken out, while improving the quality of the main focus of the set, like covering up a technic beam on the AT-TE or whatever.

Yet, the small vehicles are great as playability in the large sets. Of course, Endor would be no fun if it was just a bunker, with the AT-ST and speeder bikes sold separately.

I feel, though, that lego needs to pursue the add-on yet stand-alone aspect of sets. I would've liked the idea of the $90 Endor bunker with the optional $10 Ewok catapult.

[Rick]

It probably has to do with the wider range of themes LEGO brings out these days compared to the 1980s/1990s. Each theme gets a certain number of sets (remember the discussions about LEGO mixing various types of road plates in one set and putting straight and curved track together in a set) and the lower number of sets tends to go at the expense of the small sets. But yeah, I remember the days where there was much more choice within a theme (the total number of small sets available probably isn't much smaller, just more scattered) like Town to get birthday sets.

[David Thomsen]

There have been a lot of sets recently that have a couple of things I want, but don't really want the whole thing. Like, I want the taxi from the new train station, but not the station itself. And I want the crane and some of the carriages from the new cargo train, but not the track or the train itself. And I want the bus and the car and the sweeper from the city transportation set, but not the tram.

If these things were available individually, I would definitely buy them. As they are... it's a bit too extravagant to buy a set with more than twice as many pieces as I need.

I actually wish BrickLink had a way to buy and sell set components, instead of just whole sets or individual pieces. Like, selling bag two of a set with instruction manual two and all the stickers relating to model two. Has anyone looked into this? I think it would be brilliant.

Edited June 28, 2010 by David Thomsen

[pinioncorp]

Personally I think TLG has quite a few smaller sets, however their larger sets are becoming too modular, ie. they are a collection of smaller sets instead of a larger item. It may come down to that sets now are seperated into numbered bags, stifling the options. The artificial limit on yearly releases really puts a dampen on the risk they can take with their sets.

[roamingstop]

There have been a lot of sets recently that have a couple of things I want, but don't really want the whole thing. Like, I want the taxi from the new train station, but not the station itself. And I want the crane and some of the carriages from the new cargo train, but not the track or the train itself. And I want the bus and the car and the sweeper from the city transportation set, but not the tram.

If these things were available individually, I would definitely buy them. As they are... it's a bit too extravagant to buy a set with more than twice as many pieces as I need.

I actually wish BrickLink had a way to buy and sell set components, instead of just whole sets or individual pieces. Like, selling bag two of a set with instruction manual two and all the stickers relating to model two. Has anyone looked into this? I think it would be brilliant.

This was exactly why I had asked CopMike / Ambassedors about asking TLG to open up PAB to 'Pick a Bag'. I.e. select a bag from one of the larger sets and sell it on its own... via PAB. You could easily take bage 3,4,5 from the Train Set, or Bag 1 for the tram. The request was treated as 'why no seperate Emerald Night carriage' and got short shrift (i.e. trains are not profitable, yada yada yada). Never mind.

From a product management perspective: whilst breaking sets sounds appealing it also limits the total volume which can be sold. Many people would be quite happy for Pick a Bag from TLG... but they probably think it is better to allow the secondary market to swallow risks such as unsold boxes, instructions, elements.

If I had the upfront cash I would do this as a wholeseller / AFOL and use it to fund my hobby... but it is sometimes outrageous. E.g. I recently saw the elements from the Cargo train sell on Ebay as 107 GBP for the Locomotive + controller, >23 GBP for each of the carriages and freight crane, and this did not include the flexible track. UK RRP: 130 GBP. Resell as subsets via Ebay... >180 GBP.

There are people doing this directly on bricklink - but registering the set as 'used, incomplete' and the description as 'new sealed bags for EN carriage' and 'new sealed bags for EN Locomotive'. Alternatively the the 'buy Lego, Custom'. However it does not have a easy search tag...

[antp]

To answer Scorion's last question: it is Gaborone

About small sets, I agree: when I was kid I remember I got sometimes a "big" set at 25$ (e.g. at birthday) but usually it was smaller sets around 10-20$, often vehicles.

To take the example of bus+tram+truck, being kid I would have loved these (especially the bus), but could get them more easily separately.

[Holodoc]

Anyway, what do you think? Am I right? Am I wrong? Should I snort ABS powder? What is the capital of Botswana?

You're absolutely right, Scorpion!

Here are some examples of what I would have liked to be sold seperately:

1) 7641 City Corner

- the bus

2) 7686 Helicopter Transporter

- the motorcycle

3) 7747 Wind Turbine Transport

- the turbine / the small car / the truck (especially when not all of the wind turbine can be loaded on ONE truck! )

4) 7994 LEGO City Harbour

- the truck

and finally one thing that counts for every train set:

5) 7939 Cargo Train

- each waggon/coach should be sold seperately!!!

[antp]

and finally one thing that counts for every train set:

5) 7939 Cargo Train

each waggon/coach should be sold seperately!!!

Indeed. Or at least trains without tracks: I have 12V tracks so if I buy a modern train I'd rather use RV trains on my old tracks than on the new ones. Or just put the wagons on a 12V-powered train.

I'd like to have a nice passenger train but I do not wish to buy a full set with rails, engine, etc. I just need the parts of the wagons :D For that something like the hobby train sold few years ago on lego.com was good, but still expensive if you wanted to make several wagons of the same style.

Edited June 28, 2010 by antp

[Eilif]

Here's another tack, I haven't run the numbers on this, but my theory is this:

Take a look at smalish sets back in the day, and what they cost. Now adjust for inflation. I think you'll find that in non-licensed themes LEGO has nearly as many sets at the same price point as it did in the past.

There seem to be more sets in the slightly higher price points, but when you do the math, in many cases, you're getting the same or more LEGO for your $, it's just that your dollar is worth less now that it was in the 80's or 90's.

Alot of this perception may come the fact that there are fewere small licensed sets. It's true that IJ, Spongebob, Avatar, PoP and Star Wars have fewer small sets, but when you're dealing with licensed sets with interesting charachters, I have a feeling it doesn't pay to "give away" much at the low price points..

Lastly, as to dividing up sets, why would LEGO do that when they know that most LEGO buyers will pay more for the larger sets? LEGO is a luxury toy, sold mostly to with middle-class and up buying power. Those buyers will spend the scratch for the larger sets, but even they wouldn't, if they could get the parts they wanted separately.

Some of us can't afford to buy all the large sets, but it would not make sense for LEGO to divide up sets at the cost of selling more of it's flagship products. I'm quite sure that if TLG thought they could make more $ selling individual sections of kits, they would.

[brickzone]

Here's another tack, I haven't run the numbers on this, but my theory is this:

Take a look at smalish sets back in the day, and what they cost. Now adjust for inflation. I think you'll find that in non-licensed themes LEGO has nearly as many sets at the same price point as it did in the past.

There seem to be more sets in the slightly higher price points, but when you do the math, in many cases, you're getting the same or more LEGO for your $, it's just that your dollar is worth less now that it was in the 80's or 90's.

Alot of this perception may come the fact that there are fewere small licensed sets. It's true that IJ, Spongebob, Avatar, PoP and Star Wars have fewer small sets, but when you're dealing with licensed sets with interesting charachters, I have a feeling it doesn't pay to "give away" much at the low price points..

Even so the small licensed sets have cool "goodies" in them and there are the likes of the SW battlepacks.

I agree with your analysis about inflation and the fact that a lot of bigger sets today are "extra". One of the retailers here in Ireland stocking Lego, Smyths Toys, have 130 Lego products (excluding Lego Games) on their website. Of these, two-thirds are €30 or less.

Looking at the prices of sets in days gone by they seem so cheap, but I remember when we were kids (1980s), Lego was *expensive* (much more so than now) compared to how much everyday items cost.

Edited June 28, 2010 by brickzone

[blhc11]

That's exactly how I feel about alot of sets, including the new airport, I only want the airplane, and I'm not gonna buy the separatly sold airplane because it doesn't even maintain a similar design and has alot of flaws, if they did like they did back in 2006(I believe, though I'm not sure) and sold an airplane with a similar design to the one included in that year's airport, then they'd sell alot more, and that's why I believe lego should do like they once did, keep great small sets instead of making big sets that can only be considered great because of 1 seperate part, I actually asked for the gas station set(and got it) for my birthday because of the car and the motorcycle, I ended up enjoying it alot but that's a rare exception, if it didn't have thoose veichles I would certainly have asked for something else, and this really gets on my nerves, the designers are great, true, but TLG makes me feel like they are making fun of us buyers.

Cheers.

By- a guy who's angry(as usual).

[Cardinal Brick]

I think there are two issues here one is the question in the title as to if TLG is pursuing the wrong strategy, I don't think they are they've been making more money in recent year and seems to have manged to perferct the marketing mix so I don't think they're pursuing the wrong strategy.

It would be nice to have more smaller sets but I'm not sure if it'd be economically viable for TLG, certainly we know that individual train cars aren't so I asume with alot of other sets you can say the same thing. I could go back and find some old catalogues and show bits that from bigger sets that would have been great small sets so I don't think this is anything new to be honest.

[jonwil]

Something else that has changed is the size and parts count of sets.

For example a set like 6695 Shell Tanker is smaller than a modern set like the 3180 Tank Truck. Plus the new tank truck has the little fuel pump thing. (this practice of including small "extras" in a set seems to be growing, e.g. the little radar stand in the 3181 Passenger Plane or the little stand in the 3178 Seaplane or the telephone in the red sports car set)

Also, in themes like Castle and Space, there is the "play value" factor. Take the new Kingdoms set 7950 (the smallest Kingdoms set except the impulses). In the past, you would have gotten the catapult and one figure (and the catapult would have been smaller) but now you get a larger catapult, a weapons rack with some weapons plus a "bad guy" figure.

Same with Space Police, the ship in Squidman Escape is a little larger than small space ships of the past plus you get the alien figure.

Larger sets are getting bigger too, compare the size of a set like 6352 with the size of the crane in the 7633 Construction Site.

I also agree that too many of the large sets these days feel like "multiple small sets in one large box", including the 7633 Construction Site, 7637 Farm, 7642 Garage, 7641 City Corner and others.

[Commodore Hornbricker]

Didn't Lego have the most successful toy sales of any company worldwide last year? Why would they want to change now? I don't have anything against more smaller sets but not if it comes at the expense of fewer larger ones. The larger sets usually have a better price per part ratio.

[fenrir]

I think TLC is doing great.

TLC offers sets with most of the times these prices: (in EURO's)

- 2.99

- 6.99

- 9.99

- 19.99

- 49.99

- 99.99

* this can be a bad thing too, because the designers are limited to this amount of money and bricks.

The big castle from the Kingdoms line is looking great. I think the 6.99 and 9.99 sets are a great addition to the castle. (minifigs, a catapult etc.)

So well done. ( Kingdoms line anyway)

Fenrir

[hoeij]

Is it possible Lego is hurting itself by putting out a few huge expensive sets instead of many small cheap (hopefully) ones?

My guess is that hot-selling big sets is the reason that the company is doing well financially. The modular houses are around $150 and were selling like pancakes! Who would have thought that you can sell so many copies of such large sets? That must be a big part of their bottom line.

I was really looking forward to their new passenger train. The previous one sold for $89. Unfortunately, the new one is $129. I don't want to pay that much, so I haven't bought it, but I can understand their reasoning a little bit though: the moment that the previous passenger train was sold out, the eBay price went from $90 to $150. Perhaps the lego company is thinking that if eBay can sell passenger trains well over $100, then so can lego. I don't know if that's true though, I still have some hope that that price will have to come down at some point.

I did recently buy some very nice small sets though, I think the selection is pretty good actually.

Edited June 28, 2010 by hoeij

[The Green Brick Giant]

I was really looking forward to their new passenger train. The previous one sold for $89. Unfortunately, the new one is $129.

And ten years ago the train set cost $120, so what is your point? The new trains really aren't that expensive in the grand scheme of things. The RC train when it came out was actually $80 and because $90 the following year, it is the only running train I can remember that cost less than $100.

LEGO makes 500+ things a year now when 20 years ago they made 150 (Look it up on Brickset). Sure some of those things are lame like a pencil set, but LEGO still is making more sets recently than in the past. The difference is instead of having 2-3 small sets per theme and each theme having 10+ sets a year LEGO now makes a lot more themes, tons more themes and each other only has 1-2 cheaper sets. My point is that I think LEGO is pretty much making the same amount of cheaper sets as before (Minus Star Wars because Star Wars fans are crazy. $25 for a land speeder?!?!) but because there are so many themes the cheap sets are spread out to themes others don't care about.

If 20 years ago there were 20 Town sets, 20 Space sets and 20 Castle sets there would be more cheap sets per theme than 15 City sets, 4 Space sets, 8 Toy Story sets, 5 PoP sets, 5 World Racer sets, 8 Atlantis sets and 7 Kingdoms sets, 4 Power Miners because the cheap sets are spread through 3-4 times as many themes.

[Norro]

Hopefully Lego will take the success of the Collectible Minifigure series and build on it.

I found that sentence brilliant...

God Bless,

Nathan

[user]

I think that set sizes are fine but I am sick of in the VS themes PM,SP3,Agents you have a vehicle for both teams in one set instead of just having one really epic vehicle in the set for one team so you don't have to buy a $50 set if you just want one of the vehicles. Also it would be nice to have more than two factions.

[Eilif]

Didn't Lego have the most successful toy sales of any company worldwide last year?

I think this is the real point. Whatever we think about the "wrong strategy", what LEGO is doing is obviously working.

IIRC, the early 90's were the beginning of what was nearly the end for TLG. By the late 90's, they were on a downward spiral. It seems reasonably clear that what they are doing now is better for their bottom line that what they were doing then.

Here's a link to my favorite article about how LEGO almost fell apart, but came back.

http://www.strategy-business.com/article/07306?pg=all