LEGO is one of the most popular toys of all time. Chances are, you had a set as a kid and may even have a few bricks lying around as an adult. It’s a simple system that offers an almost limitless number of possibilities, but there’s one downside: LEGO is pretty expensive.
That popularity hasn’t taken a dent, despite LEGO having a higher price point than similar systems, like Mattel’s Mega Bloks. On average, retailers sell seven LEGO sets every second globally, and they sell enough bricks annually to circle the world five times.
There is also some logic behind the price tag. While some of it is the profit margin, more goes into a LEGO brick than you think. Factors related to the brick itself, the environment, and the characters that wander around within your creations all play a part.
Let’s take a detailed look at why your LEGO bricks can cost mega bucks.
As we’ve mentioned, LEGO is one of the most popular toys ever to exist and is the most popular construction toy—a category that includes, but is not limited to, LEGO clones. Being popular and having a good reputation allows companies to charge a premium. Just as a Nike or Levi’s logo can make a piece of clothing more expensive, the word LEGO stamped onto a plastic brick will bump up the price.
The LEGO brand has even expanded beyond the brick. Both video games and movies featuring either original LEGO characters or established characters with a LEGO twist have done well in the charts and box offices over recent years, as have collaborations with fashion brands. Although the plots and gameplay features on offer were interesting enough on their own, the venture illustrates the LEGO brand’s draw as a whole.
LEGO makes its products from several different types of plastic. The company manufactures standard bricks from acrylonitrile butadiene styrene (ABS)—a hard, durable plastic well suited to the brick’s requirements. ABS produces a long-lasting toy, and the plastic works with the injection molding process LEGO uses to manufacture said bricks.
Other materials used include high impact polystyrene for the baseplates, polypropylene for the accessories, and thermoplastic polyester for transparent parts. The company lists 12 types of plastic currently being used in their range.
The machines manufacturing the bricks have tolerances as small as 10 micrometers (0.01m). These tight tolerances ensure a good fit and a stable connection between two bricks. Although other brands design their products to “fit” with LEGO, they probably won’t connect as well due to the tighter tolerances and high standards LEGO sets.
The plastic used may not be of the same quality either. Growing up, I had LEGO sets along with alternative sets from other manufacturers. I distinctly remember the plastic on the off-brand sets looking and feeling cheaper than that of the actual LEGO bricks.
Research costs money, and LEGO is constantly developing new products. LEGO releases over 850 sets per year on average. According to the company’s Annual Report 2020, new products are 55% of the portfolio each year. Each of those products required research, testing, and in some cases, the development of specialist machine parts before it hit the market. The report also states that LEGO spends over $138 million per year on research and development.
The company isn’t just focusing on developing new sets; LEGO is even redeveloping the bricks themselves. LEGO developed an environmental focus after acknowledging that a high percentage of the billions of LEGO bricks around will still exist in hundreds of years. Since then, the company has developed bricks made from sustainable materials like sugar cane, bricks made from recycled plastic bottles and pledged to wave goodbye to single-use plastic packaging by 2025.
If your urge to build things overlaps with your passion for something like Star Wars or Harry Potter, chances are you’ve encountered a licensed LEGO set at some point. The Danish toy company has acquired the rights to produce sets based on multiple film and TV franchises over the years, and those rights aren’t free.
Exact figures for each licensing deal will vary but will likely include a flat fee and a royalty on every licensed set sold. In 2020 LEGO spent around $500 million on “license and royalty expenses.” LEGO isn’t taking these expenses on the chin; they pass the costs on to the consumer.
Despite seeming to cost a small fortune, pieces of the company’s main “System” line are a fraction of their 1970s price. Other pieces, like LEGO Minifigs, cost around half what they did back in the 1960s, despite a spike in price over the last couple of years.
More expensive sets are available, with some costing several hundred dollars. However, those sets contain thousands of individual pieces. The LEGO Millennium Falcon set is one of the more expensive on the market, costing just shy of $800 new; the set contains a whopping 7541 pieces, so you’re paying 10.6 cents per piece, despite the fact this is an intricately designed and licensed set. While relatively recent, the huge, expensive sets make up a small fraction of the 850+ LEGO releases every year. The average price of a set has also declined as time has gone on.
So there we are. A lot goes into a LEGO brick, from materials to brand licensing. The manufacturers have still managed to drop the price despite massively increasing variety, acquiring all kinds of licenses, further developing their brand, and maintaining quality standards. They also seem to be doing their bit to improve the environment and the lives of disadvantaged people too.
Yes, LEGO is expensive, but when you look at where the money goes, it’s worth it.