A few days ago on All Things Considered, NPR’s Planet Money wanted to know, “Why are Legos (sic) so expensive?”
The segment compared LEGO to MegaBloks. While Mega’s products are less expensive, their annual global sales are only about 10 percent of LEGO’s. The segment pointed to several factors — better manufacturing techniques for LEGO, better licenses, overall brand perception.
I tend to agree with this analysis. MegaBloks pieces feel different than LEGO blocks, LEGO’s licenses are more mainstream than Mega’s and hit more interests, LEGO is licensed out into other markets (apparel, video games) beyond the building blocks. When you have a market that’s dominated by one major player, it’s difficult for new players to carve out their niche. Also, I think that the off-brand manufacturers (and there are more than just Mega) have realistic views about their sales potential with their product mix. Given all that, LEGO can (and will) charge what they want for their products because the market will bear it.
I admit, I’m not a big fan of MegaBloks — I find the pieces difficult to assemble, and the instructions are occasionally cryptic — but I really like some other off-brand construction blocks. Hasbro’s KRE-O sets are fantastic (I have several of the Transformers sets, and I’m looking forward to their Star Trek sets). And I think Character Options’ Doctor Who Character Building Sets are the most LEGO-like non-LEGO on the market.
One niche that an off-brand manufacturer could fill that isn’t being served would be with generic sets. Okay, there are still LEGO City sets, so if you want police cars or airports you can find them. And the LEGO Castle line continues. But when I was growing up there were generic Space sets. Now it seems that Star Wars has filled that niche from LEGO. Sometimes, though, you really want spacesuits and lunar landers and lunar rovers and Martian explorers.
Steampunk/Victoriana would be another niche that someone could fill. I could imagine a Sherlock Holmes theme. (Heck, even though it’s more modern, I could imagine a Sherlock theme from Character Options.) A steampunk space theme would be awesome — Wellsian Martian walkers, Vernean space capsules, space ships out of Edison’s Conquest of Mars.
Competitors exploiting these niches wouldn’t make LEGO less expensive, but that would give LEGO and off-brand builders new worlds to explore and play in. 🙂