Lego's new digital spin-off, Lego Digital Play, has turned a profit in its first year of operation, marking a significant step in the toymaker's move away from the small plastic bricks that made it famous. The company, which aims to captivate a new generation of children who play on iPads rather than with their hands, reported a pre-tax profit of £1.4 million for the year ending December, according to its first-ever accounts.
A New Frontier for Lego?
In February last year, the brick business announced its intention to establish Lego Digital Play, with a mission to create “meaningful, creative, and joyful digital entertainment experiences for future generations.” The Danish investment firm Kirkbi, which owns Lego, appointed Aaron Loeb as president—a video game adviser who previously worked on games for the Marvel, Simpsons, and Alien franchises.
“More children are playing online, and gaming offers opportunities to reach more kids with innovative play experiences,” said Niels Christiansen, chief executive of Lego Holding, when announcing the new firm. Lego Digital Play's first accounts show a turnover of £12.4 million in its first year and £8.6 million in shareholder funds, despite it being unclear whether the company has released any products yet. The firm appears to be in its early stages, with job advertisements for 20 roles at its London offices. Lego Holding, Kirkbi, and Lego Digital Play declined to elaborate on what the new firm has produced so far.
Physical Brick Will Always Win
Kirkbi confirmed that all existing digital Lego products would remain under the management of Lego Holding. Previous digital releases include the video game Lego Party, a mini-game within the popular survival game Fortnite, and an augmented reality app for its Lego Technic range.
Henry White, a 20-year-old geography student whose Lego TikToks have amassed millions of views under the handle Henrz Brickz, expressed caution about the toymaker's digital push. “Of course they have to move with the times and keep up with digital media and popularity, but the whole point of Lego is an escape from the screens. I think for the average consumer of Lego, going digital doesn’t really work. The physical brick will always win, and Lego as a company should recognise this,” he said.
Lego has expanded rapidly in recent years, rolling out its “smart brick” which produces sound effects and flashing lights, and expanding into Formula 1 in a bid to break the US market.
