Commentary

Lego Drops A Dime On Tencent And A Digital Partnership Arises

Danish toymaker Lego and Chinese digital monolith Tencent Holdings have formed a partnership to create an online video and gaming platform and to explore building a “safe” social network for children in the world’s second-largest consumer market — $31 billion in toys and games alone, according to Reuters.

“The partnership includes developing a Lego video zone for children on the Tencent video platform, as well as developing and operating Lego-branded licensed games, the toymaker said,” Pei Li and Jacob Gronholt-Pedersen report.

“Shenzhen-based Tencent is one of China's most powerful internet companies, running the WeChat messaging app as well as online payment platforms and games. Because Chinese authorities have largely shut out Western companies like Google and Facebook, homegrown internet companies like Tencent have been able to grow rapidly in size,” the AP reports in U.S. News

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“For Lego, the move is part of a reorganization of its business that it began last year, when it announced it was shedding 1,400 jobs, or 8% of its workforce,” the AP continues. Lego Group chairman Jørgen Vig Knudstorp said at the time that it was “pressing the reset button,” you may recall. 

“The partnership will also seek to bring Lego Life, a social media network for young children that the toymaker has launched in 26 countries, to China as well as publish the online operating system for its Boost coding toys,” reports Richard Milne for Financial Times

“Lego executives underlined the emphasis on safety in the partnership. The toymaker has long been worried about the potential misuse of its products online. Some former executives have bemoaned that the company’s conservative approach to the digital world has allowed the likes of Minecraft to steal a march on the toymaker,” he continues.

“We’ve seen more and more Chinese children engage with the world digitally, and the partnership will bring them safe and imaginative digital Lego content,” Jacob Kragh, general manager of Lego in China, tells Milne.

“Our most important purpose is to inspire children and help them develop through play. Through our 85-year history we have always had children’s safety as our highest priority when developing Lego products. This heritage and approach is also reflected in our work to ensure safe digital Lego experiences,” CMO Julia Goldin pledges in a news release.

Okay, we get it. Safe.

“Lego has long experimented with digital options on its own. In its latest solo effort, rolled out in December, Lego released an augmented-reality app that allows children to play with virtual Lego sets on smartphones and other devices,” reports Saabira Chaudhuri for the Wall Street Journal

“But its digital efforts have so far yielded mixed results. Euromonitor analyst Matthew Hudak, in a recent research note, wrote Lego’s mobile-gaming business hasn’t yet translated into a major hit for the brand,” Chaudhuri continues.

China has been a “bright spot” for the company, CNBC.com's Arjun Kharpal reports, “with revenues growing double-digit versus declines in the U.S. and parts of Europe in the first half of 2017,” the last time the family-owned company released financial figures. But it faces competition from Mattel, the maker of Barbie, which last year announced a deal to sell its products in China via Alibaba's marketplace website tmall.com, he writes.

As well as “Hasbro, the firm behind My Little Pony,” Reuters points out.

For those of you feeling nostalgic about simpler times, when Legos were mere plastic blocks that snapped into each other and created wondrous mini empires in which fertile imaginations could roam, fret no more. The Independent’s Olivia Petter reports that “a bar made entirely from Lego is on its way to London, with one million blocks currently being transported to the city for its construction.

“While the details remain shrouded in secrecy, the pop-up bar is set to open in spring 2018 and will feature an array of Lego sculptures for fans to feast their eyes upon,” she continues. “According to Legobar’s website, there will also be a local DJ on-site providing guests with ample entertainment while they drink/build/attempt to do both at the same time.”

Old-fashioned social networking, IOW.

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