Lego to unveil metaverse details with Epic Games soon, CEO says

CARY – Toy giant Lego, already a major investor in Cary-based Epic Games, plans to announce in the near future its plans for a metaverse virtual world venture with Epic, according to The Financial Times in London.

The newspaper reported Tuesday that privately held Lego plans to invest in digital playing experiences and ecommerce. Among the plans:

“It is preparing to announce details of a collaboration in the metaverse with Epic Games, known for the Fortnite video game.”

That news could very well come later this month at the Game Developers Conference in San Francisco where Epic plans to establish a significance presence. Among the big topics for Epic: The metaverse.

Lego and Epic announced an investment and a metaverse initiative within days of each other last April.

Founding guidelines of this project as declared by the companies are:

• Protect children’s right to play by making safety and wellbeing a priority.
• Safeguard children’s privacy by putting their best interests first.
• Empower children and adults with tools that give them control over their digital experience.

“The LEGO Group has captivated the imagination of children and adults through creative play for nearly a century, and we are excited to come together to build a space in the metaverse that’s fun, entertaining, and made for kids and families,” said Epic cofounder and CEO Tim Sweeney, whose success with the privately held company has made him a multibillionaire.

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The Denmark-based company said in its financial report for 2022 that profits increased by 5% from a year earlier and sales rose even as it raised prices on higher-ticket toys. It said net profit rose to 13.8 billion kroner ($2 billion) from 13.3 billion kroner. Sales were up 12%, while revenue grew 17% to 64 billion kroner ($9.2 billion).

CEO Niels B. Christiansen called 2022 “a milestone year” as the privately held company celebrated its 90th anniversary.

We “landed the year beyond expectations on the back of exceptional growth last year and despite challenging market conditions,” he said.

With inflation growing, Lego increased prices on about a quarter of its products, Christiansen said.

“The low-cost products were not affected. The increase was chiefly on our expensive products,” he said. “Despite that, we saw our sales increase.”

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Lego said that there was growth in all markets, particularly in the Americas and Western Europe.

The company opened 155 stores worldwide last year to reach 904 locations. The colorful building bricks are sold in more than 130 countries.

Christiansen said 48% of the company’s products were new and that some top themes included Lego City, “Stars Wars” and Harry Potter.

He also highlighted collaborations, including one with Louis Vuitton to create windows and store displays for the Christmas season tied to the 200th birthday of the luxury fashion house.

“By doing a partnership with others, we can reach customers in a different way,” he said. “In the case of Louis Vuitton, we hope to reach women, mothers. We do hope to have more girls playing with Lego.”

This year, Lego expects single-digit revenue growth.

Headquartered in Billund, Denmark, Lego has factories on three continents, including what it says is a new carbon-neutral factory in Vietnam. There are plans for another carbon-neutral factory in Richmond, Virginia.

Lego was founded in 1932 by Ole Kirk Kristiansen and its name is derived from the Danish words “leg godt,” or “play well.”

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