(CNN) — Lego has come a long way from just selling tubs of plastic bricks. It has weathered near bankruptcy to become the world’s most profitable toy manufacturer.
Lego is seemingly everywhere these days. Sunday night The Simpsons went full on Lego for their 550th episode. Melding their animation with a full 3D generated Lego Springfield. Lady Gaga tapped a Lego artist to turn her torso into yellow bricks for her latest music video. There is even a Lego documentary that premiered a few days ago at the Tribeca Film Festival.
It all comes on the heels of a massive year for the Danish toy maker. Lego reported $1.1 billion in profits for 2013 making it the most profitable toy company in the world. Not bad for a company with an expired patent that nearly went belly up a decade ago.
Dave Robertson, a professor at the Wharton School of Business and author of Brick by Brick, which tracked the company’s battle back from the brink, says, “They got themselves into businesses they didn’t understand, some of them might have been good for another company, but they weren’t good for Lego.”
He says for years the success of Lego was directly tied to toys based on two film franchises, Star Wars and Harry Potter, “2003 there is no movie from either franchise and [Lego was] left with 94% of their product line which is unprofitable, unpopular, and in some cases just not very Lego-y. And so they were really close to bankruptcy.”
Lego jettisoned the unlego-like products and changed their focus. “Lego pays $3 per kilogram and sells it for $75 a kilogram,” continued Robertson, “so they’re making a lot of money on the boxes of bricks, but the kids are buying the story really.”
The company has expanded to create Lego video-games and reached out to girls with more gender-neutral ads, plus new Lego friends and Lego Disney princess products.This year Lego bet big on telling their own story, teaming up with Warner Brothers, the sister company of CNN within Time Warner, to make The Lego Movie.
The film has been a monster hit bringing in more than $450 million worldwide. And Robertson thinks Lego may have something even bigger in mind. “It’s not an accident that the week the movie came out there were was over a dozen different kits in the stores that kids could buy and play out little dramas from within the movie. I really see Lego as moving away from competing with Mattel and moving toward competing with Disney.”
Competing with Disney? Lego Executive Michael McNally doesn’t go that far but he says the company sees potential, “the idea that we can be an inspiration for motion pictures that are engaging in the way that we found this film has been is truly exciting for us.”
In other words, Lego will keep turning those plastic bricks into cold hard cash. There is another Lego movie in the pipeline. Lego Movie 2 got the green light earlier this year, and is expected in theatres in 2017.
Copyright CNN 2014