Comment by sixo
2 months ago
Prices are constrained by demand moreso than by cost of production. Lego pieces are expensive because they can be, they still sell, and this is largely due to the quality. As long as the quality moat persists, they can charge as much as people will pay, and--good for them!
That you personally would prefer lower prices does not mean they "should" be lower. Those lower costs of production, to Lego company, "should" mean higher profits, not lower prices, and again--good for them!
> As long as the quality moat persists
The risk Lego faces is that they don't actually have a quality moat any longer. You can get non-lego sets with no stickers, plenty of prints, LED lighting, at a cheaper price, and with the exact same piece quality. I purchased this set: https://www.lumibricks.com/collections/steampunk-world/produ... over Christmas, and I paid $105 because it was on sale. The pieces were indistinguishable from Lego in quality, and the lights and lack of stickers was a quality increase from what Lego offers.
What moat Lego has is: brand recognition and licenses. Which aren't nothing, but don't offer much protection.
Not disagreeing with you, but at least when I hear "lego knockoff" I think of the shitty ones, because I've never seen a Lego knockoff that wasn't shitty.
Lumibricks seems like a promising brand, but I've never heard of them, possibly because they don't spend as much on marketing as lego. And if they did spend more in order to compete with Lego, they might need to increase price!
> but I've never heard of them, possibly because they don't spend as much on marketing as lego
It’s a newer brand—they changed their name to it some time last year. But they seemed to spend a lot on advertising last Christmas—at least on YouTube, it seemed like tons of reviewers were talking about their sets. That’s how I found out about them, at any rate. And I’ll say—the one I got came together nicely, and looks great. The tons of lights are just, really neat.
> when I hear "lego knockoff" I think of the shitty ones, because I've never seen a Lego knockoff that wasn't shitty.
The cheap-o ones you get like at the dollar store, absolutely. But Chinese manufacturers have been making good quality knockoffs for a while. A decade at least? I bought my first knock-off technic set around 10 years ago, and it was 90% the quality of Lego at 25% the price. But the quality has only gotten better since, and is now totally on par with Lego. Admittedly, the price has gone up, too.
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A reputation moat is still a moat. It seems to me that Lego prices will drop as soon as they are forced to by competition, and not before, and this is fine.
> A reputation moat is still a moat.
It is, absolutely, but it’s a lot more shallow a moat than having a product quality moat.
> Lego prices will drop as soon as they are forced to by competition, and not before, and this is fine.
I agree, they’ll survive quite well. But the large profit margin they’ve grown accustomed to might disappear, and that probably doesn’t bode well for their management.
And heck, maybe they’ll stop shipping stickers on expensive sets, too. That would be nice.
What you mention is true, but Lego sets are (almost always) very well designed, specially the ones for kids.
I've seen enough reviews of recent Lego sets to doubt this. Sets with a brick or two where the color is off, sets where the final model falls apart if you look at it wrong, and when there's fan designed alternatives which are more solid and better looking it's clear it wasn't a physical limitation.
Not to mention sets that indeed just feel like a ripoff, like the pyramid of giza which costs $130 and is actually just half of a pyramid, but the backside of the model has slots that let you connect it with another half if you buy two of them. And they even admit in the marketing it's an incomplete product with "Complete the pyramid - This model comes with clear instructions and can be connected to a second model (sold separately) to create a full pyramid", of course only visible after scrolling or looking at more product pictures.
They are. I should have added that Lego’s designers are a bit better still. You can get botanical sets from a lot of manufacturers, but the Lego ones are just nicer.