Lego Plots a Comeback
Bionicle Toys' Building Blocks Are a Story Line, 'Viral Marketing' and the Psychology of Fads

By Krissah Williams
Washington Post Staff Writer
Sunday, August 19, 2001; Page H01

Late last year, five Danish toy designers began to weave a tale of good and evil, creating the kind of heroes and bad guys that American boys love. They used the standard formula: exotic names, special powers, an unknown land.

Then they added easy-to-build action figures, trading cards, T-shirts, comic books, a soundtrack, and Internet, computer and video games. All to tell the story of Lego's Bionicle, which they hope will be the next cool toy line. Their plan is to create a popular story that reveals itself slowly, adding characters to keep the kids coming back for more, with toys cheap enough that parents keep buying.

The toymaker is spending $15 million to get the word out about Bionicle, making it the biggest U.S. toy launch ever for the determinedly traditional 67-year-old company best known for its classic plastic bricks.

Like much of the toy industry, Lego is financially ailing as more American boys ignore traditional toys in favor of video and computer games and television. Lego, the third-largest toy company in the United States, behind Mattel Inc. and Hasbro Inc., lost money in 1998 and again last year, its only losses in decades. The company -- still owned primarily by the family of founder Ole Kirk Christiansen -- has watched revenue stall at about $1 billion.

Thus, much is riding on its Bionicle venture. To attract the been-there, done-that generation of American boys, Lego's designers and marketers are trying their darnedest to be cool, even aloof, almost teasing kids to get their attention.

In December, the first bit of information about Bionicle (from "biological" and "chronicle") was revealed on the company's Web site: "Once a paradise, Mata Nui has become a place of darkness and fear, ruled by the deadly Makuta. Now six mighty heroes, the Toa, have come to gather the masks of power and challenge the Makuta. Explore the island . . . learn the legends . . . and begin to solve the mystery of Bionicle."

It stopped there. But Lego's marketers hoped youngsters would be salivating for more.

About once a month, new chapters are added to the Web site, along with information about characters and the special masks. This summer, Lego mailed 1 1/2 million free comic books to Lego club members that gave details not available on the Web site.

In May and June, the Toa (hero) and Turaga (villager) building toys were released in the United States. The futuristic-looking figures stand about 7 inches tall and are assembled from plastic pieces. They snap together Lego-style but contain none of the traditional Lego brick shapes. The figures cost $2.99 to $6.99, although more complex remote-control-operated figures will be priced as high as $69.99.

In a few weeks, information will be revealed about the bad guys, called Rahi, and other twists and turns are promised along the way.

Children "understand media," said Colin Gillespie, manager of marketing for Bionicle in the United States. "If they are spoon-fed everything at the start, it's a bit of a turnoff. "If you build up too much energy right at the front end and tell the whole story, people might be tired of it by the end."

The Bionicle launch is based on the viral marketing strategy, which is the rage among manufacturers hoping to appeal to fad-prone American children and teenagers. Viral marketing works to create a buzz one customer at a time rather than rely on mass advertisements such as television commercials.

Lego's idea: Interest one kid in the Bionicle story, who will tell another and another. To find those kids, Lego sent out six sport-utility vehicles -- each painted with one of the superheroes, who have names such as Pohatu, Onua and Tahu.

"In early June, 50 kids came up to the truck; just a few knew about Bionicle," said Gillespie. "Now, they are pulling up to places and kids are jumping in to tell the other kids about it."

The SUVs stopped at beaches, skateboard parks, playgrounds, pools and Little League fields to catch kids. Lego sought out boys who might be trendsetters -- fun kids who seemed outgoing enough to share the Bionicle story and, as Lego marketers say, "build the buzz."

At comic-book stores, Lego handed out trading cards. At retail outlets, the company gave away posters.

This fall, it will provide 3 million free book covers and locker posters to American schools. McDonald's Happy Meals will feature collectable Bionicle toys in September. Lego officials hint of a Bionicle movie and more expensive toys to be released in time for Christmas.

Jack Maywalt, 11, of the District, who first learned of Bionicle when Lego mailed him the comic book, says he's hooked, and his mom confirms that.

"If I get this, I can make all these places with them -- ice world, swamp world . . .," Jack told his mother one recent Saturday as he examined the toys at the Lego store in the Potomac Mills shopping center in Woodbridge.

The shift from the pure creativity of the traditional plastic bricks to the more contrived, action-packed world of Bionicle is an attempt to recapture the attention of American boys, said Richard Chase, a professor of psychiatry at Johns Hopkins University and chief executive of the Learning Pathways consulting firm.

"The world has changed, and the whole toy industry has been confused about how to respond to the vastly broadened range of options that children now have," Chase said. "There are media that didn't exist when Lego bricks were invented. . . . There are many more ways for children to budget their play time."

Lego's attempt to branch out from its plastic bricks to something flashier started tentatively at first. A few years ago, Lego released Roboriders and Throwbots -- two Lego products similar to Bionicle, with sticks, nuts, bolts and other pieces but with no story line. The toys initially sold well with 10-to-12-year-old boys, but they did not have the continuous draw of story-based toys.

Lego also tried going high-tech. It released Mindstorms, a group of complex robots assembled from bricks embedded with chips and lights. It was innovative but expensive -- $199.99 for a basic set.

But while Lego was fiddling with robots, other toy companies were turning to blockbuster movies, books or popular cartoons to boost sales. Hasbro bought a lucrative Pokemon license, and Japan's Bandai Co. became a force in America with its Power Ranger action figures.

In 1998, Lego joined the licensing frenzy, purchasing the rights to the ultra-popular "Star Wars" movie series and, later, the Harry Potter stories. Harry Potter Lego sets will come out later this year, and "Star Wars" became its best-selling line. But the hefty royalty payments linked to licensing agreements cut deeply into profits, analysts said.

The company has not disclosed the cost of its "Star Wars" license, but Hasbro -- its only major competitor in the "Star Wars" toy market -- paid $600 million in advance to renew its license.

Such payments can be risky because even hit movies and best-selling novels don't captivate children forever. Pokemon and Harry Potter are on the decline, analysts say.

"Hasbro relied on Pokemon, and it ended up hurting them. After a while, they couldn't sell them," said T.K. MacKay, a toy analyst at Morningstar Inc. "It's extremely volatile. When I was growing up, a fad lasted a lot longer than it does these days."

Developing the story line in-house eliminates the royalty payments, allowing Lego to keep the profits. But the trick for Lego is that it must build the hype itself, since it cannot rely on the following generated by hit movies or television successes.

It has enlisted the help of other companies familiar with the faddish youth culture. Universal music has a three-year licensing agreement, paying Lego for the use of the Bionicle story to create both music and multimedia CDs. And Upper Deck has a two-year licensing agreement to produce Bionicle trading cards.

Seven-year-old Lucas McCoy, who has dropped Pokemon cards in favor of Bionicle, rambles on whimsically about the story line, the music and Mata Nui -- Lego's online game, where players see from the perspective of Toa (the heroes) and try to save the island.

Taking a break from play with his Toa figures, Lucas, who lives in Bedford, Tex., talks nonstop for 20 minutes, pausing only to breathe: "It was the time before time, when the world was new. There was this bad spirit that sent a spell on Mata Nui to sleep . . . and I think their most greatest fear is sleep. It made these infected masks and Makuta is the stone, well, I think Makuta is like a dinosaur."

Several parents who have been amenable to Lego for its tilt away from violence and toward creativity say Bionicle still gives their kids a chance to build and innovate. The characters' weapons (or tools, in Lego's lingo), which include a pitchfork and a spear, don't seem to bother them.

Lucas's mom, Maria McCoy, said she and her husband play with their son and can "see his little mind working." His focus is on building, not violence, she said. "It seems pretty neat. It brings out his imaginative self."

On the other hand, the Bionicle tie-in with a broad range of products can increase the pester pressure from kids, say parents. For instance, to see the paradise island before the darkness descended upon it, kids need the Nintendo Game Boy's Bionicle game, which sells for $39.99. To access screen savers and pictures on the Bionicle Web site, kids need to buy the Bionicle characters and access the codes on the toy canisters.

The only way to keep up with the entire Bionicle soap opera is to buy all its parts. Maria McCoy said she has kept a lid on Lucas's desire to buy all the products by insisting he use his allowance. "He gets an allowance, and he can buy what he wants with it. I tell him, 'If you save your money, you can get the more pricey things,' " McCoy said.

Susan McCrea, 38, of Ayden, N.C., is considering buying a Toa for her nephew. But her four daughters, ages 2 to 11, favor Barbie dolls over Bionicle. Company spokesman Michael McNally confirms that Bionicle is more appealing to boys. So far, there is one female character, Gali, the Toa of water -- described as the sage of the group. But Gali is not pulling many girls into the story.

Like most action figures and video games, Bionicle "is very much a boys' world," said Chase. "These themes interest them." "By and large the girls tend to want a deeper understanding of what is going on, and the boys are attracted to action-oriented adventure. . . . Action seems to be easier than understanding."

Girls lean toward stories with a basis in reality, Chase said. Mattel's American Girl dolls with books that detail family origin and heritage pique girls' interest. The polar good-and-evil world of Bionicle isn't as appealing to them.

Traffic on Web sites and at toys stores indicates that boys, teenage guys and longtime Lego fans are the biggest buyers of Bionicle. Lego officials say that sales have surpassed their expectations, but they decline to release figures.

The toy's official Web site had almost 2 million hits last month. Bionicle fans also have responded to the company's create-your-own-site contest. Yahoo lists thousands of sites mentioning the toy line.

Christian Gemuenden, a 20-year-old student in southern Germany, started a Bionicle site but had to shut it down after it attracted too much traffic. Gemuenden, who follows changes to the Bionicle story closely, has collected the 72 masks of power. "I have them all, but there'll be more," he said.

Gemuenden is now helping to gather information for British friend Michael Edwards, 19, webmaster of a fan site launched in March. It lists the characters, the story and news about rare collectible masks. Edwards has found about 32 promotional masks that haven't yet been widely released.

"It's a mad hobby," said Edwards, an information technician who sometimes spends five hours a day updating his site. "I'm addicted to it."

Lego's leap away from its classic plastic brick sets hasn't won everybody over. Some still prefer doing their own thing or, as Lego puts it, to "just imagine."

Spencer Tibbs, 12, of Warrenton, said he can be more creative with older Lego sets -- which he uses to build his own creations, such as a replica of his mom's office. He doesn't like sets that require directions. "I should be more into that stuff [Bionicle], but I like the older stuff," he said.

For Lego, the big question is: Are more American boys like Lucas McCoy or Spencer Tibbs? Indeed, the Bionicle strategy is a gamble for a company that has no experience writing and promoting its own stories.

The story-line strategy has been known to fail. Earlier this year, Mattel dropped a deal with Walt Disney Co. to produce toys from its movie properties, because the arrangement hadn't resulted in big toy sales. There is no guarantee that Bionicle's story will work either, said Bret Jordan, a toy industry analyst at Advest Inc., a Hartford, Conn.-based financial services firm.

"Clearly, the risk is that your product is not well received and you waste resources creating intellectual property that winds up being a drain on the company," Jordan said.

But Lego officials exude only confidence in their approach. "Kids love stories," said Lego spokesman McNally. "It creates interest in the toys. We've created a story in and of itself that is fantastic but is so open-ended. Kids can do whatever they want with it."

He added enthusiastically: "This is one chapter in the whole story. In years following, there will be new chapters with new features. It's not meant to have a resolution right now. . . . It's all about following the story."

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