Lego, the renowned Danish toy manufacturer known for its vibrant plastic building bricks, aims to broaden its entertainment offerings and focus on the metaverse. In collaboration with Epic Games, Lego is gearing up to launch a virtual world to penetrate new digital markets and sustain its growth momentum while expanding its market share.
Lego Doubles Down On Metaverse Initiative
This initiative would clarify the company’s plans to establish a foothold in virtual worlds and expand its reach in the digital space. The company’s approach is to drive growth by providing Lego products in digital markets, thereby boosting brand recognition among online users.
Niels Christiansen, Lego CEO, discussed the company’s path to achieving this new objective. Christiansen said, “we are well-versed in immersing customers in the Lego universe within our stores. However, we are also putting in significant efforts to replicate that experience of stepping into the Lego brand universe in the digital space.”
Lego experienced substantial growth in the past year, with revenue surging by 17% compared to 2021. This is partly due to robust sales in America and Western Europe.
Moreover, consumer sales also climbed by 12% in 2022. In contrast, Hasbro and Mattel, both US-based rivals, faced difficulties.
Mattel generated $5.4 billion in revenue and $400 million in net profits in 2022, while Hasbro recorded $5.9 billion in sales but only netted $200 million in earnings. Meanwhile, other companies such as Tencent and Microsoft are gradually shifting their focus away from metaverse initiatives.
However, Lego is increasing its investment in the sector and plans to create digital spaces for children.
Lego Hiring Employees To Boost Digital Team
In April 2022, the firm invested $2 billion in Epic Games in collaboration with Sony. This investment aimed to develop its metaverse platform, which would create safe and secure virtual spaces specially designed for children to engage with the brand more closely.
Furthermore, the company has been increasing its hiring efforts to develop in-house digital experiences since May. It announced its intention to triple its software engineers.
The aim is to adopt an integrated approach that views physical and digital domains as one cohesive unit rather than separate aspects of its business. Christiansen emphasized the company’s digital thrust during that period and highlighted its robustness.
He said, “as we embark on this digital journey, we are enhancing and expanding our capabilities. Also, we would handle some of the previous functions previously outsourced to consultants. Presently, this is our most significant investment.”
According to Christiansen, exploring the metaverse is the next natural move for the company to maintain its competitive edge. Nevertheless, the company is bullish about retail’s future.
It has expanded its physical store count, launching 155 new locations in 2022.