Lego surpassed Mattel as the largest toy maker worldwide for the first time as its sales increase by 11% during the first half of 2014.
The sales of the company tripled for the past six years not only in America and Europe since it has entered new markets. Its revenues in China more than doubled after opening an office in Shanghai and a factory in Jiaxing.
The toy maker company attributes the growth of revenues to The Lego Movie that made $470 million worldwide. Add to that the company's earnings through the merchandise produced for the movie. "Not only did the movie gross around $500m worldwide, it has also been pivotal in promoting new and existing product lines," said Robert Porter, a Euromonitor analyst and researcher.
The Danish-based toy company licenses movies such as Star Wars, Harry Potter and The Avengers to create products based on them. Lego also tied up with Warner Bros. to release a Jurassic World game for next year. The company capitilizes on fandoms of blockbuster franchises to create a merchandise-buying frenzy. Though there are other building block toys in the market, Lego owns at least 80% of the total shares of sales.
There's a slump in the second quarter of Mattel's sales, the same time there's a growth in Lego's revenues. The company known for Barbie announced in July the declining profit for its flagship product aside from the revenues acquired from other line of products like Fisher-Price and Hot Wheels. Mattel also bought Mega Blocks, a Lego competitor and a toy maker focusing on building blocks and arts and crafts.
The Christmas-buying season is a critical factor for toy companies as kids start asking parents for gifts. The building-block company is hopeful as it scheduled released of video will keep the hype alive.
The upcoming holiday season will decide whether Lego can maintain its lead in sales.
