Lego’s Revenue Dropped in 2017 Because the Company Made Too Many Bricks

Lego is having its very own mid-life crisis, but they'll be okay.

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Lego recently announced that its revenue has dropped for the first time in 13 years. Don’t worry, though; the beloved plastic bricks aren’t going anywhere. The 8% dip in sales didn’t occur because people stopped loving the bricks; instead, Lego just made too many of them last year. The company simply couldn’t get the bricks out to retailers to sell them as quickly as they were being made.

The surplus in and of itself doesn’t spell too much trouble for the Danish company. A company spokesperson told Gizmodo that while annual sales suffered in 2017, consumer sales “remained steady.” That doesn’t mean everything is A-OK in Legoland: the company is still worried about the way sales in North America and Europe dropped last year.

Lego – which releases products annually – understands that the toy business is predicated on novelty and giving consumers something new. That’s part of why the company has struggled recently: it is struggling to find a consistent way to market and popularize its new products moving forward. They’ve noticeably stepped into the realm of movies and video games, but the results have been mixed. While some of those ventures, like the Lego Movie, have been met with success, others have been abject failures.

The company’s performance, while dismal for most of 2017, did peak towards the end of the year, particularly in Asia. Sales in the growing Asian market grew in the double digits last year, and a spokesperson for the company says the region has “strong potential.”

Lego chairman Jorgen Knudstorp explained to the BBC that even as the company’s sales dropped in the first months of 2018, it’s likely due to being pulled in too many directions. According to Knudstorp, Lego is aiming to become “a smaller and less complex organization”  in the near future.

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