The Danish toy giant Lego continues to demonstrate growth in a challenging market, with revenue climbing 13% in the first half of 2024. This success follows a turnaround from near-bankruptcy in the early 2000s, driven by strategic innovations across multiple business areas.
At the heart of Lego’s transformation is its successful diversification strategy. Since its first major licensing deal with Star Wars in 1999, the company has built partnerships with franchises like Harry Potter and Marvel, appealing to both children and adult collectors. These collaborations have expanded beyond entertainment to include partnerships with Formula 1 and other brands, creating sophisticated product lines that attract new consumer segments.
Recognizing the digital shift in entertainment, Lego has made moves into gaming and interactive experiences. The company’s partnership with Fortnite represents its commitment to engaging younger audiences in digital spaces while maintaining connections to its physical products. This digital expansion helps Lego stay relevant in an increasingly screen-focused world.
The company has also successfully broadened its product range beyond traditional playsets. New offerings include architectural cityscapes, artistic recreations, and botanical collections, attracting consumers who might not have previously considered Lego products.
This diversification has proven particularly valuable as the broader toy industry faces challenges from Hollywood’s disrupted production pipeline due to the global pandemic and labor strikes. Fewer new movie releases, particularly children’s films, has led to reduced opportunities for movie tie-in toys, action figures, and roleplay items across other parts of the toy industry.
Looking ahead, Lego CEO Niels Christiansen emphasizes the importance of remaining relevant to children while continuing to explore new markets and opportunities. The company’s focus on digital innovation, combined with its core building concept, positions it well for future growth. Lego’s ability to adapt to changing market conditions while maintaining its fundamental appeal demonstrates how traditional toy companies can successfully evolve in the modern marketplace.