LEGO expects games to integrate more seamlessly with its physical products, potentially leveraging technologies like augmented reality for hybrid experiences
The LEGO Group, the world's largest toymaker, is making a significant strategic shift by bringing video game development in-house. This move is a key part of the company's digital transformation journey, which aims to create seamless experiences that blend physical and digital play.
LEGO has traditionally outsourced video game production to external studios, such as TT Games. However, the company has now decided to build internal capacity and has invested heavily in its digital infrastructure. This includes tripling its software engineering team to over 1,800 members since 2022.
The investment in digital capabilities provides LEGO with the technical expertise to develop complex gaming experiences that can compete in today's sophisticated gaming market. The company has also enhanced its digital platforms and infrastructure to support this new direction.
LEGO's strategic vision is to create gaming experiences that align with its brand values and integrate seamlessly with its physical products. The company believes that this approach will allow it to stay relevant to modern children, who are increasingly spending more time online.
By developing games in-house, LEGO can ensure that these digital experiences embody the company's values and creative approach. This strategy acknowledges that LEGO's competition extends beyond traditional toy manufacturers to digital entertainment platforms like YouTube and gaming experiences.
LEGO's digital expansion has outperformed competitors like Mattel and Hasbro, despite declining US toy sales. The company has identified the "kidult" market, which accounts for 18% of US toy sales, as a promising growth segment.
LEGO is exploring the video game industry's potential as a growth engine, leveraging its brand appeal and popular gaming platforms. The company's early collaborations with popular platforms like Fortnite have demonstrated the scale of this opportunity.
While LEGO's shift towards in-house game development presents opportunities, it also poses challenges. The company must establish a successful game development studio, maintain a creative culture, and balance digital expansion with physical product innovation.
LEGO's financial strength, brand power, and long-term orientation make it well-positioned for success in game development. The company's gradual approach, building capabilities while working with external partners, allows it to develop expertise while mitigating risks. As LEGO builds its internal studio, it expects games to integrate more seamlessly with its physical products, potentially leveraging technologies like augmented reality for hybrid experiences.
About the Writer
Jenny, the tech wiz behind Jenny's Online Blog, loves diving deep into the latest technology trends, uncovering hidden gems in the gaming world, and analyzing the newest movies. When she's not glued to her screen, you might find her tinkering with gadgets or obsessing over the latest sci-fi release.What do you think of this blog? Write down at the COMMENT section below.
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