Lego teams up with Nike, Formula One to expand digital frontiers, engage young fans

LONDON: The CEO of Lego has announced that the company is working on digital games and collaborating with well-known adult brands like Nike and Formula One to engage tweens as they compete with social media for their attention.

The iconic toymaker, recognised for its colourful plastic building blocks, is ramping up investments in online play by establishing its own development team, having tripled its number of software engineers since 2022. This includes a successful partnership with the popular online game Fortnite.

Niels Christiansen, the chief executive of the Danish toymaker, noted that Lego is aiming to craft more “hybrid” experiences that blend digital and physical play, as children aged nine to twelve are spending increasing amounts of time online. “They tend to mature a bit faster and gravitate towards social media,” he remarked.

The shift in focus is also reflected in Lego’s partnerships established last year with sports brands such as Formula One and Nike, with the initial products expected to launch this year. Christiansen stressed the importance of creating exciting experiences around passion points and topics relevant to their audience. “We are noticing a change and are consciously positioning ourselves at the forefront of it to maintain our relevance,” he stated.

He described the new investment in digital games as part of a “multi-year journey” but refrained from providing specifics on the projects in development. Lego has already introduced some games in collaboration with external partners, including the recent Fortnite tie-in.

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Despite the overall toy market declining by 1 percent, Lego reported a sales increase of 13 percent, totalling 74.3 billion Danish kroner (£8.4 billion). Sales from products in the Technic and City lines, along with Harry Potter and Star Wars-themed games, performed particularly well. Operating profits also rose by 10% to 18.7 billion kroner, despite the company’s increased investment in new factories, including those located in the US and Vietnam.

Christiansen ruled out advancing the opening of a new factory in Virginia, despite potential US tariffs on goods imported from Mexico, where the majority of Lego’s North American kits are produced. He conveyed that the company has faced “a lot of volatility” in recent years due to the pandemic and rising energy costs, and it remains uncertain whether US import tariffs will be a long-term issue. The company’s approach, he explained, is to “not panic.” He expressed more concern about sustaining the product and brand’s relevance than about tariffs impacting production from Mexico.

Additionally, Lego continues to invest in sustainable materials, sourcing a third of its brick ingredients from renewable sources. The company also plans to open over 80 new stores this year, although it has been closing some locations in China to focus on larger metropolitan areas.