• Wall Street Journal, Thursday, December 24, 2009 9:16 AM

While the global toy industry slumped by 5% in the first half of 2009, Lego sales were up 23%, and CEO Jørgen Vig Knudstorp credits its combining the virtues of the virtual world of movies with the hands-on merits of its building bricks as a key factor in the revival of the Danish company's fortunes. Lego controls the construction-toy rights to properties such as "Star Wars," "Indiana Jones" and "Toy Story."

The Lego Star Wars videogame, for example, allows users to explore a Lego world and take part in quests. "Here you have a category [videogames] where many parents perceive it as not really creative and not very good for their children, but when it becomes Lego, the parent says 'Okay, now I feel comfortable, since it's Lego plus Star Wars,'" he tells Kim Hjelmgaard.

Knudstorp, a former kindergarten teacher and McKinsey consultant, was named CEO in 2004 in the midst of a steep sales decline at the company. He compares the deep engagement Lego requires to reading a book, saying it teaches children to be systematic, creative problem solvers. "We call it 'fun, but hard fun,'" he says.

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