Star Wars was Lego's first license: 25 years later, it's stronger than ever

If you're a Star Wars fan, Jens Kronvold Frederiksen may have created your childhood.

Design director of the Denmark-based Lego company, he has spent the last 25 years creating Lego Star Wars sets.

“I went to my boss and said, 'Hey, you need me in this product line,'” Frederiksen told CNBC. “For me it was like a dream come true. Star Wars and Lego together, two things I love.”

Frederiksen is not the only one. Since 1999, fans have rallied around the license, purchasing everything from Darth Vader minifigure keychains to $850 Millennium Falcon sets with more than 7,500 pieces. The brand has also grown to include a half-dozen video games and a slew of animated content on Disney+. It now also has its own home on Epic Games' popular Fortnite online gaming platform.

The Star Wars license was the first of its kind for Lego, which had never before created an official product line tied to licensed intellectual property. In fact, the Jar Jar Binks minifigure was the first to feature a custom head sculpt instead of one of Lego's iconic round faces, Frederiksen said.

Now, Lego Star Wars has become a model for the company's other brand deals: think Harry Potter, Batman and Marvel's Avengers.

“We were creating themes, but we weren't always necessarily connecting them to the deeper story,” said Jill Wilfert, Lego's director of global entertainment content and partners. “And I think for us to really see that unlocking, and how it really allowed people to open up their imagination in a different way and express their creativity in a different way, is what Star Wars did for us.”

Wilfert, who has worked at Lego for 36 years, said that before the Star Wars deal there was a lot of concern at Lego about granting any kind of license to third parties.

“Once we saw how well it translated and how people responded, it really gave us more confidence,” he said.

The Lego Star Wars collaboration came at a time of financial turmoil for Lego. In the early 2000s, the company faced high debt, stiff competition from digital gaming platforms, and a portfolio that had become overly diversified. Lego was on the brink of bankruptcy.

Strong sales of Lego Star Wars, as well as the Lego-owned Bionicle franchise, helped keep the company afloat as it reduced its product lines and closed non-essential businesses. In 2005, the company released a Lego Star Wars video game.

“It has been very successful and continues to be very successful today as a game franchise,” said Paul Southern, senior vice president of third-party marketing and franchise development at Disney. “He created the world.”

Two decades later, Lego Star Wars remains one of Lego's best-selling brands, with the company posting strong sales even when there are no new theatrical releases tied to its product.

The private company offers semiannual information on its balance sheet. In March, Lego reported that its sales rose 2% in 2023, even as the global toy industry saw a 7% sales decline, according to data from Circana.

The toymaker once again cited Lego Star Wars as a driver of those sales. Lego Icons, Lego Technic, Lego City and Lego Harry Potter also performed well.

Although it was a smaller gain than in previous years (the company saw a total sales increase of 27% in 2021 and 17% in 2022), Lego has continued to gain market share in the toy industry. A lot of that has to do with the fact that brands like Lego Star Wars appeal to multiple demographics and generations.

Lego sells sets in a variety of prices and difficulties, allowing kids to build smaller, less complicated models and act out scenes from the franchise, while hardcore collectors can build more detailed replicas of their favorite ships, hulls and movie moments. .

The evergreen nature of the franchise is key. Lego can leverage nearly 50 years of content to delight consumers of all ages.

“The most important thing for us, of course, is that this is for the children,” Frederiksen said. “The model should be really fun, creative and inspiring to play with, but it should also be a great building experience.”

That's why Lego takes some creative freedom with the sets it offers. For example, an Imperial Shuttle is almost completely white. However, giving customers a stack of white bricks would make it “impossible to find the pieces and not a fun building experience,” he said. So, Lego offers some variations in brick colors and details.

Although Frederiksen no longer designs products, he continues to manufacture everything. It is important for him to experience how each outfit comes together.

To celebrate the 25th anniversary of the partnership between Lego and Star Wars, as well as the 25th anniversary of “The Phantom Menace”, Lego will be releasing numerous special sets. There's the TIE Interceptor model that sells for $230, a Mos Espa Podrace diorama for $80, a Droideka model for $65, and new BrickHeadz characters for under $10 each.

“What we see a lot in properties and in Star Wars, maybe more than others, is something that families do together,” Wilfert said. “Often a parent introduces you to Star Wars for the first time, your parents grew up loving Star Wars, and we just see that by having things in our portfolio that allow those connections and allow families to connect together, we're really seeing the relevance of that.”

With new digital products like video games and Fortnite, Lego can appeal to younger consumers.

“We're trying to make sure we're in relevant places where we know kids are spending their time,” Wilfert said.

The Lego Star Wars brand has evolved to encompass more than just bricks and minifigures: It has become its own ecosystem, Southern said.

“The Lego Star Wars world forms a separate identity within our overall business, and that makes it very unique,” he said.

Southern was at Lucasfilm when the partnership with Lego and Star Wars was launched. He transitioned to Walt Disney Company when Lucasfilm was acquired a decade ago, so he has seen the growth of Lego Star Wars firsthand.

Part of that growth is the humor that has become associated with the Lego Star Wars brand. This includes slapstick moments in video games and animated content.

“We've established an ecosystem and a tone of voice that allows us to do things that are ultimately a little cheeky, a little more fun,” Southern said.

And that humor has spread to other franchises.

“Star Wars, you know, allowed us to open people's eyes to how Lego can create humor and charm for a person.” [intellectual property] “That might not exist,” Wilfert said. “We found that most IP owners are quite willing to let us play around a little.”

Between video games and animated projects, Lego has worked with franchises such as Harry Potter, Indiana Jones, Batman, Pirates of the Caribbean, The Lord of the Rings, Marvel, Jurassic World and Pixar's “The Incredibles.”

But it all started with Star Wars, which continues to grow.

“We've taken the passion that fans and kids have for that brand and brought it to other areas,” Southern said. he said, noting that along with video games, Lego Star Wars can also be found in the editorial section and even in clothing.

The diversity of the product and its strong sales led Disney and Lego to extend their Star Wars contract until 2032.

“The relationship has become easier because there are people who have been working on both sides throughout the relationship,” Southern said. “Now they're like a family. He's very frank, very open, very collaborative.”

The long license delivery period allows Disney and Lego to work together on long-term projects, such as video games and animation, as well as milestone anniversary celebrations.

“We're celebrating 25 years of working together,” Southern said. “One of the things that's also very important is that we hope to be here in another 25 years, celebrating the way we've evolved our relationship and made it relevant for generations to come.”