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It's Sunday! Time for some bites. We’re making it quick because of Ramadan and all…

LEGO, the beloved brick-building toy that has captured the time and money of generations, is at a make-or-break crossroads.

This week, we’re diving into two aspects of LEGO's journey:

1. Its unique appeal in the realm of play

2. The company’s strategic direction for the future

From its distinctive building experience to its foray into the entertainment industry, LEGO stands at a crossroads, poised to redefine itself in a constantly evolving landscape of toys and technology.

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Bricked up: Sizing up Lego

When it comes to investing in toy companies, Lego is the best bet anyone can make.

The company does twice the business than Mattel or Hasbro with a higher gross profit margin than both.

Tackling + Embracing Friction

Mattel and Hasbro focus on action figures, dolls, and ready-made toy sets. In contrast, LEGO offers pieces and bricks for building.

This creates a unique, more engaging experience that requires effort from kids. Unlike plug-and-play toys like Barbie or Transformers, LEGO involves building, enjoying the process, and then playing with the creation.

Initially, this extra effort might seem like a drawback, but it's actually a key part of LEGO's appeal. With LEGO, you can build anything you imagine. Additionally, LEGO's licensing deals, which appeal to both adults and kids, are one of its greatest advantages.

What’s next for Lego?

We're going to do some crystal ball gazing here, but basically, LEGO needs to focus even more on content.

It's already outshining Mattel and Hasbro, but for the next phase of its growth, LEGO has to dive deep into entertainment. They need to create a flagship platform where fans can really engage with the brand. Right now, it's a bit like a quick fix—you see a LEGO set, you buy it. Maybe your kid watches a movie and suddenly wants that LEGO set they saw in the store, amidst all those vibrant colors.

Why does LEGO need to do this? Well, it's not just competing with other toy companies anymore. LEGO's real competition is iPads and other digital distractions. So, to stay ahead, LEGO has to up its game in the entertainment world.

2025 Predictions: Lego Edition

1. Lego marks Disney as a competitor

2. It starts reigning its distribution of content; an all-in-one place for Lego, if you will

3. Lego introduces a subscription service like the one Disney should have introduced years ago: 

   1. Super high premium with early-release/rare purchase opportunities

   2. LegoLand attendance advantages

What AI Made This Week

Sick Fits by Ahmed

Very simple this week: I’m highlighting Kim Jones’ entire tenure at Christian Dior.

I don’t have a lot to say, other than the fact that every collection every year seems to be like he’s really having fun playing inside and outside the lines.

Words like “current” and “fresh” don’t cut it. His design progression feels like a writer who finally finds their voice and finishes the novel they were toiling over for years.

Have a great week!

Ahmed and Peter