Questions for Jake

Glencaer · Post by **Glencaer** » Thu Jul 07, 2005 6:10 pm

Jake McKee has offered to get answers for any questions you might have. Post them to this list, and I'll forward them to him, and then post the responces.

But first some rules: No questions about future product development. Jake can't answer it, so I won't ask it. No questions about when Vikings are coming - I've already asked

.

So post your questions here!

Barbapple · Post by **Barbapple** » Thu Jul 07, 2005 6:17 pm

Dear Jake,
Why have the prices for LEGO shot up to a near unreasonable price, when it only takes a few dollars, at most, to produce? Are you not afraid of turning out like NIKE, where the people realize, 'You know what, we can get the same product for cheaper!'. How do you plan to retain LEGO fans with climbing prices and lowering the peice number of produces?

Brian Gibbons

eNiGMa · Post by **eNiGMa** » Thu Jul 07, 2005 7:29 pm

I dunno how close this is to the line of "future products," but I have a question on the MOC line. Why has LEGO not done more with the MOC line than two or three sets? They seemed to be successful enough. I have the same question about the Legends, but you could just rephrase my whole question above to fit that.

Glencaer · Post by **Glencaer** » Thu Jul 07, 2005 7:34 pm

Sorry Barb - I accidentally hit 'edit' instead of 'quote' - Sorry!

Dear Jake,
Why have the prices for LEGO shot up to a near unreasonable price, when it only takes a few dollars, at most, to produce? Are you not afraid of turning out like NIKE, where the people realize, 'You know what, we can get the same product for cheaper!'. How do you plan to retain LEGO fans with climbing prices and lowering the peice number of produces?

Brian Gibbons

Jake's answer will be: a LEGO set costs more than the materials that go into the box. There are employees to pay, shipping costs, advertising, etc etc etc. Inflation affects them as much as anyone else - their costs have been growing and they have no choice to raise the prices of their products.

Not to mention: are you unaware of TLG's financial woes? They barely turned a profit last year, and the years before have produces staggering losses. TLG is doing everything to keep costs reasonable, while keeping quality high. It is quality that seperates TLG from all other competitors.

And, I think price-per-piece has remained relatively stable at ~$.10. Star Wars is a bit more, but you have to factor in the added cost of the license.

If you could back up your claims with some numbers, I might pass it on to Jake. But as is, I don't think your basic assumptions are correct (LEGO's prices have been climbing radically, Price-per-piece is raising, that LEGO is cheap to produce and being marked up for extra profit).

-Lenny

Glencaer · Post by **Glencaer** » Thu Jul 07, 2005 7:35 pm

eNiGMa wrote:I dunno how close this is to the line of "future products," but I have a question on the MOC line. Why has LEGO not done more with the MOC line than two or three sets? They seemed to be successful enough. I have the same question about the Legends, but you could just rephrase my whole question above to fit that.

It is exactly 'future products.' Jake's standing answer regarding MOCline and Legends is: "We're working on stuff - neither line has died!!"

-Lenny

Jojo · Post by **Jojo** » Thu Jul 07, 2005 9:03 pm

Hello!

Glencaer wrote:It is exactly 'future products.' Jake's standing answer regarding MOCline and Legends is: "We're working on stuff - neither line has died!!"

Besides this there is another valid reason why there are so few MOC-sets: There are just not enough "set-able" MOCs out there. Most MOCs are way too good and too big to become possibly official sets. It's not like TLC could come along and release a MOC-set every couple of months.

Bye
Jojo

Post by **architect** » Thu Jul 07, 2005 10:06 pm

Besides this there is another valid reason why there are so few MOC-sets: There are just not enough "set-able" MOCs out there. Most MOCs are way too good and too big to become possibly official sets. It's not like TLC could come along and release a MOC-set every couple of months.

Shameless plug:

http://www.brickshelf.com/gallery/BenjaminE/Cabin/

But I do agree with Jojo, very few mocs look great, play well, and do not have too many pieces in them so they are affordable.

Ben

Dragonlord Esq. · Post by **Dragonlord Esq.** » Thu Jul 07, 2005 11:21 pm

Bah. Woodcutters' cabins don't have neon laser rangers and dinosaurs.

Barbapple · Post by **Barbapple** » Thu Jul 07, 2005 11:47 pm

Not to mention: are you unaware of TLG's financial woes? They barely turned a profit last year, and the years before have produces staggering losses. TLG is doing everything to keep costs reasonable, while keeping quality high. It is quality that seperates TLG from all other competitors.

Firstly, the whole thing was such a corporate answer, but this part in perticular seems irrelivent to me. Ever wonder why they barly turned a profit? It was because their prices are laughable.
And the piece per price is stunningly high.
I went to the shop at home site and took a random star-wars set.
Have a peek.

It is $29.99 CAD, for 111 pieces
Even 8777 (Vladic Attack) Rounds off to 28 cents a peice
Thats roughly 27 cents a brick, without taxes included, and streight from lego, so no added expence as when you buy it from a store. It is a known fact that the price per piece is on the rise, and I will dig up the stats if you need them. However, I would just like to know, from Jake, what their future finantial plans are. What if they (LEGO) cannot stay in the black another year, and begins to go under? Do they plan to lower prices? Lower Quality? Lay off workers?

Glencaer · Post by **Glencaer** » Fri Jul 08, 2005 1:21 am

Barbapple wrote:I will dig up the stats if you need them. However, I would just like to know, from Jake, what their future finantial plans are. What if they (LEGO) cannot stay in the black another year, and begins to go under? Do they plan to lower prices? Lower Quality? Lay off workers?

I'd like stats, yes. I'd like to see PPP for a variety of sets over the years. I just bought this 2005 set, at full price, and it's PPP is $.05 - so yeah, I'd like to see a full report before I go to Jake to demand an answer.

Have you checked Lugnet for financial reports? There are a few over there that will probably give you the information you're looking for. However, I doubt Jake has access to future financial plans, or that he would be able to share them with us, if he did.

Jake HAS mentioned previously that TLG will >not< lower quality. TLG has laid off workers, some in 2003 and more in 2004. And I don't think TLG can seriously lower their prices and maintain their level of quality at the same time. Personally, I prefer high prices over lower quality.

-Lenny

Lord_Of_The_LEGO · Post by **Lord_Of_The_LEGO** » Fri Jul 08, 2005 3:11 am

Glencaer wrote:And I don't think TLG can seriously lower their prices and maintain their level of quality at the same time. Personally, I prefer high prices over lower quality.

Aye, me too. Do you really want crappy bricks for cheap? If so, don't demand The LEGO Company change, simply buy megablocks!

The ratio of price to quality is 1:1. You want better quality in food? Building toys? Cars? Houses? Then you should be willing the shell out the cash for it. I know I am.

Jim · Post by **Jim** » Fri Jul 08, 2005 5:51 am

Well, I'd love to know about future products, but I understand the limited info there. Will there be more 'spring cleaning" type products coming out soon? Is this generic enough to ask?

Also, please ask Jake what is the availability of brick sets for inner city pre-schools and day care centers. If not Jake, maybe he can get a name and contact info.

Thanks for collecting the questions and answers.

Jim

PS: I don't believe that the PPB for new sets is unreasonably more now then it was 20 years ago. I remember good sets being as much as US$0.10/piece then. Its not very much different now, even without taking inflation into account. Sets with be molded creatures are, of course, more expensive/piece, but most sets are US$0.10-$0.12/piece.

Of course, this is just my general impression with no hard facts or data.

Post by **rogue27** » Fri Jul 08, 2005 11:22 am

6066 had 211 parts for $20. You can still find sets with the same PPP ratio today, and .10 per part is pretty typical for a set with minifigs.

The PPP is much lower on designer series sets, and typically as low as .02 on tubs of basic bricks. Unfortunately, it's higher on minifig sets with lots of large pre-molded parts such as elephants or star wars beasts.

Minifig based sets did seem to shoot up in price in the past 5-7 years, but perhaps that is simply because the use of expensive pre-molded parts has increased?

I think that is the primary factor for PPP getting worse, and I would be happy if TLC would less large specialty parts.

Barbapple · Post by **Barbapple** » Sat Jul 09, 2005 12:27 am

Lord_Of_The_LEGO wrote:
Glencaer wrote:And I don't think TLG can seriously lower their prices and maintain their level of quality at the same time. Personally, I prefer high prices over lower quality.
Aye, me too. Do you really want crappy bricks for cheap? If so, don't demand The LEGO Company change, simply buy megablocks!

The ratio of price to quality is 1:1. You want better quality in food? Building toys? Cars? Houses? Then you should be willing the shell out the cash for it. I know I am.

Honestly enough, when I buy bulk bricks, I do buy megablocks. Because they is very little difference in brick quality for much much cheaper. That is bulk bricks, not the Dragons, figures, land, etc. that is low quality.And how can you even think you can't maintain the quality while you lower the price? Even if you do take a set whos price-to-peice ratio is .05:1, can you honestly say that the brick took 5 cents to produce? I know some profit goes to paying workers as well, but mega-blocks can pay workers for less, so why can't lego? Workers have nothing at all to do with quality, so just cut from their pay.

But, As Dick Cravit said, "As long as people will accept cr*p, It will be financilly profitable to dispence it"

Glencaer · Post by **Glencaer** » Sat Jul 09, 2005 1:35 pm

Barbapple wrote:I know some profit goes to paying workers as well, but mega-blocks can pay workers for less, so why can't lego? Workers have nothing at all to do with quality, so just cut from their pay.

So speaks the man with no job.

Have you checked into what material Megabloks are made out of? I'm pretty sure it is cheaper PVC compared to LEGO's ABS. For diehard fans, that is one our core issues - that LEGO doesn't switch to using cheaper plastics. That's one of the big things we mean when we talk about 'Quality' - which LEGO has and Megabloks doesn't.

I can pass on concerns about PPP - but I'm not going to ask about LEGO's future financial plans as I know Jake can't give me that information. LEGO has been publishing financial reports for the past 5 years where they talk about future plans - I suggest you do a little research and read up on those reports.

-Lenny