The Danish toymaker Lego is expanding its assault into the virtual world by joining forces with the video game industry facilitator Epic Games.
The Lego Group is teaming together with game engine maker Epic Games to develop a metaverse-driven effort aimed at the digital market.
According to sources, the famed Danish toy company intends to extend its entertainment products portfolio with this collaborative endeavor.
The Lego-Epic metaverse project comprises a huge virtual environment driven by the American pc game and software development company resources.
Per (1) FT, Lego is prepared to disclose details of its metaverse effort with Epic Games. The blocks toy brick company’s goal to continue its market share gain and growth streak is building a presence in digital environments.
Providing Lego products to consumers in such regions online could boost Lego’s already substantial online brand recognition.
Niels Christiansen, CEO of Lego, commented on the emerging metaverse, saying:
“We have much going on in the digital realm, so we’re raising the investment. We are experts at transporting customers to the Lego universe while they shop, and we’re doing everything we can to make the Lego brand world feel as immersive as possible online.”
This initiative is not Lego’s first endeavor toward establishing a digital area for its audience. The Danish toy manufacturer also joined forces with Sony in April of last year by investing $2 billion in video game developer Epic Games.
The goal was to create a metaverse system to help endear the toy line to children in a risk-free environment. Lego, at the time, promoted the online environment as kid-friendly and family-oriented.
Lego’s revenue and profitability have climbed by two-thirds over the past three years, begun by the Covid boom.
During the pandemic, heightened curiosity from kids and adults in its plastic blocks fueled Lego’s extraordinary growth. The Danish toymaker saw a 17% increase in sales over 2021 in 2022. Despite macroeconomic difficulties, Lego brought in $9.3 billion in revenue last year, with net profits increasing by 4% to $2 billion.
Lego’s phenomenal three-year growth rate has surpassed its two primary U.S. competitors, Mattel and Hasbro.
Last year, Mattel earned revenues of $5.4 billion with net earnings of $400 million. Hasbro, meanwhile, raked in $5.9 billion in revenue but only $200 million in net profit.
Strong figures in Western Europe and the United States drove a 12% increase in consumer sales for Lego that year.
Yet the well-known Danish toymaker expects growth to “normalize” to single-digit percentages in 2023. Yet, Lego is certain that it can expand at a rate greater than the overall toy market. Christiansen elaborated further by saying:
“Growth has returned to normal this year, as we said it would. Our current progress justifies further investment on our part. The toy business has not been particularly cyclical throughout history.”
The Lego Group planned to launch production facilities in Vietnam in 2020 and the United States in 2025. This objective is intended to help the privately held toy manufacturer expand its operations outside of Europe.