Lego Mindstorms: What Went Wrong?

latif writes "In recent years, Lego Mindstorms has generated more media buzz for Lego than all of its other product lines combined, but surprisingly, Mindstorms seem to be out of favor at Lego. The Mindstorms line has been cut down to a single set and Lego is not interested in marketing even that set. Lego has been in a lot of financial trouble in recent times and its neglect of a product line with solid sales potential might seem odd but this is not so. I have done an analysis of Lego's Mindstorms options and my analysis indicates that Lego has solid economic reasons for backing away from the Mindstorms line."

Comments

Back to the basics

[GreyWolf3000]

Lego has dumbed down their sets too much. When I played legos as a kid, we'd only buy "sets" so that we had more pieces to make our own creations. Nowadays, the sets they sell have all these wierd specialized pieces which make constructing whatever model they have prepared for you easier.

The thing that made legos great was how much they used to enable creativity. Now they've gone the other way, and all the sets prevent you from making your own creation because of wierd specialized pieces.

Go back to the basics. Hell, just go back to Space Police, Blacktron, Castle, and Forest legos. That'd be cool.

Re:Back to the basics

[grahamsz]

That was the best part. We had something like 3 of those large plastic totes filled with lego and another couple with technic and played with that shit for hours making huge contraptions.

If i were a kid now i'm not sure i'd want to be able to build some crappy version of harry potter or some star wars model.

Re:Back to the basics

[SageMusings]

I tried to find one of those same sets for my children. Unfortunately, they are all small, specialized kits.

My biggest complaint is the eggregiuos (sp?) price. Lego toys are WAY over priced considering they are just simple plastic blocks. If they cut the price, I would make sure the Christmas tree this year had plenty of Legos for my kids.

Re:Back to the basics

[Chyeld]

That isn't dumbing down, that is attempting to force you to buy new sets instead of using old ones.

If 60% of your legos are 'one use only' parts, then that's 40% more you have to buy before you could do as much with them as you could a decade ago. The problem Lego has is that their product was designed to last and is always 'backwards compatable' they are afraid of saturating their market and having what happened when I was growing up. Back then, they were having problems selling sets, not because no one thought they were worth anything, but because after about three or four sets, you never needed to buy any more unless Billy managed to sitck the entire set up his nose or down the heating vents.

This is also why they are moving onto things like "Star Wars" and "Spiderman" instead of generic Space Police or 'build a city' sets. Even if you have all the pieces then, you want to buy the next set because you 'cant' build Spiderman without the 20 pieces they specially molded to make it look like Spiderman.

Mindstorm is a perfect example of the problem. They had a $200 set, and once you bought it, there wasn't any hook to make you buy more. So no one did. It didn't matter that they made huge profit on that $200 set that would have probably been more like $20 to create. If you aren't continuing to buy, then they failed.

Re:Back to the basics

[rkcallaghan]

Mindstorm is a perfect example of the problem. They had a $200 set, and once you bought it, there wasn't any hook to make you buy more. So no one did. It didn't matter that they made huge profit on that $200 set that would have probably been more like $20 to create. If you aren't continuing to buy, then they failed.

Geez, with businesses and people both thinking like this, it's no wonder we can't get anything anymore without a 2 year contract with DRM and a penalty for buying something else.

Why do we have to turn everything in to a time limited, disposable, keep repurchasing nightmare? Mindstorms failed because as you said, it took $20 to make and cost $200 -- they sold it above the price point the market was willing and able to bear. No one wants to pay 1000% markup.

Sell your quality products like Mindstorms at a reasonable price and they will fly off the shelves, its Christmas even. The typical price point is somewhere in the $35-50 range these days for most things (a video game, a couple of CDs, etc..) and I imagine most parents would be happier giving quality legos than 50 Cent and Grand Theft Auto.

~Rebecca

Re:Back to the basics

[StarvingSE]

I agree, I recently perused the current selection of lego sets and I definately noticed the lack of creative potential in the sets. I remember sets had included specialized pieces in the past, but even these were open ended enough to be used for a variety of purposes (for example, tiny plastic antennaes included with space sets that could be used for space stations, or radio towers in a town building, etc).

What would you use the front windsheild piece on the TIE fighter model for other than a tie fighter? I guess you can be creative with it, but it will always make any spaceship built with it look like a TIE fighter knock-off.

The article mentions that children are giving up traditional toys for video game at an earlier age. This is a sad state of affairs, and I feel that it will result in a less creative and less intelligent generation. When I was growing up, I had 8-bit nintendo, I had computer games, and I enjoyed them. But I also highly valued my time playing with lego and erector sets. These promoted creative, math, and engineering type skills. My point is that I had access to both mediums, and I chose to split my time between the two. I wonder what else is making children less inclined to play with traditional toys and more attracted to the "idiot box" as my mother used to call the Nintendo.

Re:Back to the basics

[indigoid]

Take a really close look at some Lego pieces someday. Then have a look at
some other toys in your toy store. Lego's manufacturing tolerances are very
narrow indeed, and they must be; if they didn't you'd not be able to
put blocks together. Modern manufacturing has improved, to be sure, but they
have been doing this for decades.

Re:Back to the basics

[BewireNomali]

Dude, they do those sets for marketing purposes. Children are flooded with toys designed for the impulse buy... expertly tied into the latest kids movie or DVD and/or kids radio, etc. Lego can't compete on those terms... so they do cross-marketing to grow the audience and grab some mindshare. The kids who have a natural affinity for legos latch on - the others move on after the impulse buy.

Our economy is such that, in general... it's the impulse buyers that keep makers of consumer products afloat rather than the loyal customer.

Ny nephew is an atypical child, but he latched on to legos early, and now, at nine... he's expanded the size of his set tenfold and builds huge and complex constructs regularly. The reason he fell into it is because I was a huge lego guy as a kid and passed the love on to him. We often build things together - he sends me pix and we consult on design.

Interestingly enough, many companies are having problems with keeping mindshare for the same reason. For example, the sports leagues (baseball, football, etc.) are facing an increasingly older demographic, as these generations have failed to instill their love for the sport in their kids and grandkids. The NFL speculates that 90% of their fans pick up the sport from a father or father figure. The implosion of the nuclear family and the lack of permanent father figures mean that generations of boys don't have an instilled passion for baseball or football... or whatever. Venture onto a kids channel during daytime hours and you'll be bombarded with NFL for kids and/or NBA for kids commercials et al.

I think legos suffer from a similar problem. they are great toys that a child for the most part needs to be introduced to. Modern day toys are things that are designed to babysit kids for parents, as opposed to involving them and engaging them together. And that's if kids are playing with toys at all. The only toys my nephew has are legos. Other than that, he's a gamer. His friends are no different, except that they don't even like legos. They play games and ride bikes.

This dude I knew once bought an old pocket watch at an estate sale. After a few tokes, while playing splinter cell co-op, he tells me that he's gonna keep the watch in his family... start a tradition. I laughed uproariously; it was the funniest thing I'd heard ever. I understand his sentiment though... now anyway. Part and parcel of a quickly evolving popular culture is a resetting of the mindset, like goldfish....

I know I've gotten completely off-topic... but it's ironic that the very companies that seek to destroy that which is good in man for profit are the very same companies we work for.

Re:Back to the basics

[Znork]

"Because eveyone has to eat,"

Yes, food is a time-limited, disposable nightmare. That doesnt mean you have to churn out time limited disposable nightmares to exchange for food.

Specific players in an economy may gain by creating deliberately time-limited products, but the economy as a whole, and the wealth of society as a whole gets diminished.

The classical example would be the broken window fallacy; the bakers broken window does not generate more employment and higher turnover in the economy. It seems that way when you only look at the economic chain following the window replacement, but in fact it merely forces the baker to buy a new window instead of buying a new pot, thus causing there to be the same number of windows but one less pot available in the economy.

Money spent replacing something that gets destroyed or deliberately obsoleted without cause is not money coming from nowhere, it's money that would have been spent purchasing (and financing the creation of) something else.

"Then what? What do you sell then?"

Then you damn well sell something else or get a job, just like everyone else. A free market economy is not a corporate welfare system intended to support the profits of people who want to keep doing the same thing over and over again when they've already saturated their market.

The very foundation of the creation of wealth in a free market economy is that the ever increasing efficiency in the economy is what is allowing everyone to accumulate as much material wealth as possible. Legos get so cheap that everyone can own them? Great, that's the whole idea of a free market, it's done its thing, legos are no longer a scarcity, we've all become 'richer', we now have the spare wealth that would have been spent buying legos available to buy something else. Now go over to maintenance mode on that old product and produce something new, attracting that newly available spare wealth so we all become even 'richer' again.

"There is nothing wrong with trying to 'keep them coming back'"

If you truly understand the fundamentals of the economics of the world then you will understand what is wrong with trying to keep them coming back with certain methods. Deliberate unnecessary obsolecense has very specific effects on the wealth of society and the economy as a whole. A sale gained for one by unecessary obsolecense is a sale lost for someone else, and ultimately a piece of 'wealth' that goes uncreated for us all. And so, it can be considered 'wrong', in the same way as any other deliberate destruction of someone elses property.

Re:Back to the basics

[LiquidCoooled]

Take a look at any microchip, even the little tiny ICs.
They all have a much lower tolerance to faults and most sell for fractions of a pence.

Lego isn't some technical miracle, its a molded plastic piece.

Re:Back to the basics

[inferis]

The price is not the problem. Parents are willing to spend hundreds of dollars on consoles and games, so why would a few sets of legos cost too much for them?

The real problem is that kids aren't as creative anymore as they used to be. Playing an PS2 game is "easy", while building something with Legos requires thought and time. Most kids don't know better than to consume (blame TV, for instance) so playing with Legos is generally harder than playing with a PSP.

I think.

I don't know what's going on with Big Brick

[Txiasaeia]

First, they switch out their creative product lines (I'm thinking primarily of the wonderful space sets they had 10-25 years ago) for Star Wars, Harry Potter, and Spider Man. Next, they slowly kill Mindstorms? I haven't bought any Lego since they dropped their space lines for branded crap, and if they continue with these poor marketing decisions, I doubt they'll be of any real influence by the time my oldest is old enough to play with Lego. (And don't get me started on how they've been screwing around with Duplo over the last couple of years!)

On the plus side, at least they keep on churning out basic tubs.

The problem with Legos...

[GeorgeMcBay]

I love Legos* to death, but they are just too damn expensive. Normal, everyday people just don't like the idea of paying a hundred bucks for a couple of handfuls of plastic blocks, no matter how cool they are.

On the more specific topic of the Mindstorms kit, the author of that article seems to assume everyone who might be interested in Lego would be interested in Mindstorms, which just isn't true. Most people aren't interested in programming their own toys. I know it is difficult for geeks to believe this (and I say this as a professional C++ programmer for the past 10 years), but it is true.

*(yeah, that's right, I called them Legos, suck it down trademark Nazis)

Someone just finished an economics class?

[cafeman]

It's an interesting write-up, but I think the conclusions latif's come to aren't warranted. Firstly, all the speculation about Mindstorms price elasticity of demand are based on the assumption that strong consumer interest exists. Lego Mindstorms is competing against (read in the same price range) as Robosapien and the like. These toys are in a premium segment of the market - they're the "big gift" for Christmas and birthdays. Without having seen any sales figures, I'd be surprised if there were strong demand for Mindstorms - the price is just too high. It's anecdotal, but I've only ever seen a few (if any) mindstorm stock items on the shelves in any of the stores I've ever been into. And, they've typically been in electronics stores, not toy shops. That's not typically a characteristic of a high demand item.

To be honest, it looks like someone's just completed an economics course and decided to try applying their knowledge to a real-world problem. I mean, the only point in examining price elasticity of demand in this context would have been if one had already established that Lego was losing money and were interested in determining whether or not Lego could raise prices without sacrificing sales. Same goes for the piece cost analysis. Which doesn't take into account the complexity of unique parts, I might add - Lego can achieve some degree of economies of scale with their common parts (6x2 / 4x2 bricks, helmets, etc). Mindstorms has a large number of parts that are only relevant for the Mindstorms line (such as gears, IR sensors, pulleys, etc). Production costs are likely to be higher, and because they're not piggy-backing on a fad (like Harry Potter or Star Wars), sales are also probably going to be lower.

The assumption that Mindstorms is cannibalising sales is also a stretch, in my opinion. Far more likely that their association with movie brands such as Star Wars and Harry Potter creates substitutable products. Both those brands, as an example, are pitched at the same demographic. And, neither is strictly complementary, from a kid's perspective. Which would you rather - a complete line-up of Star Wars characters, vehicles, and environs, or a blend of HP and SW?

In my opinion, the simpler explanation is that Mindstorms appeals to a very small niche - kids who think with parents who are trying to encourage learning and are willing to spend the time with their kids. Far more likely that they never achieved the scale of sales they were expecting, but because of the sunk costs associated with R&D and brand development, they're unwilling to kill the line entirely. Whether or not that's the economically wise decision depends on their unit revenue and long-run average cost of production.

Said it before

[Lord_Dweomer]

Ok, I thought the "why are Legos sucking" discussion had been done to death here several times before.

Specialized bricks are what is killing Lego!

There, we may all go on with trying to catch up with all the new stories that just appeared...which are dated several hours ago.

Here's my 2 cents

[Anonymous Coward]

After owning a RIS kit for some years now + expansion kits, having gone to the Robotics challenge at LegoLand, and demoing the kit at various school functions, here's my observations about it:

• Many kids are trained on video games where things have to be learned in a few minutes, or 85%-95% of them will put it back down and collect dust. Even though the default "brick" language is very good, getting the whole "system" set up (installing the software, IR programmer cable setup, setting up the "brick") and learning the language just to do something simple is going to put off a LOT of kids. Sorry, that's just what I've observed. Even in a GATE class, most are put off by the overhead, and certainly it overwhelms most of the teachers and parents these days. Sure, there are counterexamples, but we're talking about why isn't this kit as popular as some thought it should be... What would I do about it? Make a brick out of a Nintendo Game boy advance, where you can program it and plug it in without a computer. Make the user interface easier for first timers.

• The intro examples are still too complex to "hook" most people into playing with this system, IMHO. Even the Legoland robotics contest didn't let you build everything and program everything from scratch, but had a few preset plans, as I vaugely remember.

• IMHO, the brick is too heavy and bulky for autonomous, self propelling systems. To make a self-propelled robot, most of your legos in the kit has to go towards supporting the brick and servos. Much of the weight is due to the large number of AA batteries. Why doesn't Lego license other companies to make compatible bricks that are lighter in weight and more capable (open source vs. closed argument?)

• Once you build a few robots and get more sophisticated, you rapidly run into limitations in either the servo output, brick programming, brick I/O capability, etc. Once someone is hooked, they have to go to third party languages, parts, etc. Most kids aren't THAT resourceful. Of course, a lot of nerdy kids can do it, and I've seen that, but, again, we're talking about why RIS isn't as popular as it can be. If you want it to be more populare, there has to be more expansion support (yes, even more than the old expansion kits)

This kit has or had potential to hook kids into robotics, but IMHO they should emphasize extending a "video game" interface into real life peripherals (ie, doing something in a "video game" experience causes something in real life with Mindstorms something like augmented reality). Once kids see augmented reality with Mindstorms, then that can hook them into learning how to do the more complex things, like programming. Furthermore, open up the kit so other companies can extend the kit without threats of lawsuits from Lego.

What about next year?

[Otto]

Why do we have to turn everything in to a time limited, disposable, keep repurchasing nightmare?

Because companies are in for the long haul.

Let's say they take your advice, and build a Mindstorms lineup with the cool electronics bricks on the cheap. Say, $40 for the RIS with just the electronics and mechanical parts. Maybe a couple of add-on sets for more electronics and mechanical gears. Then say they go back to selling the big boxes of bricks again, like they had when I was a kid. You use these to build the models themselves, and the RIS stuff for the movement and such. Mark it all at a reasonable price so that for $100-150, you can get one fantastic set of Legos that will let you build anything you can imagine, as a kid. Nothing huge, but all the joy of Lego plus the learning experience of the Mindstorms gear. Easily done, and they'd make a killer profit. Everybody would get one.

Then next year rolls around, and they go out of business. Those Lego bricks *last*. My sister's kids will be playing with the same bricks I had 30 years previously. As long as you don't lose them to the evils of the vaccum cleaner, they just freakin' last forever.

Lego just has an unusual business. They're into selling timeless toys, but the problem with timeless toys is that they are actually timeless. They sold the big boxes of bricks 30 years ago and it almost killed the company. It's all down to profit, really. They make more money selling those crappy models with all the custom pieces and selling *less* of them than they did by selling the generic bricks on the cheap at a still substantial profit.

Yes, we all want the big buckets of bricks and we all want the electronic coolness that is the Mindstorms line, but the fact is that selling those is not a way to achieve long term profitability. They're not trying to sell to you right now, they're trying to continue selling to you and your kids, and their kids, forever.

Okay, so that sucks, but it does make sense from their point of view.

One thing not seemingly mentioned anywhere is that Lego seems to have the notion building internally of starting up a different market for the older people into Lego. Us old people who still remember the big buckets of bricks can sign up for their catalog. I got one the other day, and yes, you can buy bricks in bulk. Not random sets, but sets of specific brick types, basically by the bag. It's kinda interesting, actually. For the Lego-philes, I recommend looking around their webpage and signing up for the catalog to see what's what there. Yes, the catalog is full of all the Harry Potter and Spiderman crap, but in the center is a nice foldout where you can just buy pieces in bulk. You could amass one hell of a large lego collection for a decent price by buying one bag of everything they have. Or if you have a specific idea, it would be great for making a large model of whatever type you like.

IMNSHO...

[bigt_littleodd]

Lego started its downhill slide a couple of decades ago.

Back in the (my) day, Lego just sold boxes full of rectangular blocks, mostly just red and white ones, with some gray flat plates and the occasional clear or triangular roof tiles. I made TWA jetliners, Apollo rockets (they had to be square, since I didn't have enough curved pieces), space ships, tanks, garages, bridges and tunnels for my Hot Wheels, etc.

The sets didn't include step-by-step instructions for making any of these things. AAMOF, I don't remember any instruction sheets at all.

Inspiration came from the pictures on the Lego box and the imaginations of my friends and myself.

Years ago, I looked back at my Legos and realized it was probably the most influential toy of my childhood. Hence, I wanted to pass this glorious experience on to my son. I spent, along with the help of many relatives, literally thousands of dollars on Lego for my boy.

We started with Duplo, then graduated up the Lego ladder. As time passed, the kits became, as others have noted here, very specific to themes, and highly specialized. Sometimes the pieces were so specialized that they would not work well with other kits.

I watched my son assemble these kits, following the supplied instructions exactly. He was very good at it, and he was very happy with the results he got. He also got to be very good at troubleshooting where he put in the wrong piece in Technics sets. This was a Good Thing(TM), I thought.

Then one day, while he was bored, I suggested that take apart some of his Lego and build something new from the pieces. He looked at me like I had three heads. He asked me where he could get instructions for assembling new objects, since he had already assembled all of the variations of the kits' instruction manuals.

I was crestfallen. It confirmed right then and there that Lego Corporate had, over the years, managed to remove all the imagination and excitement of Lego and kids being creative with simple chunks of plastic.

Then Mindstorms came out! I was so excited that I bought a set right away, plus a few (expensive) accessories for it. I gave it to my son, at the time 9 years old, for Christmas. Once he saw that it contained no instructions for specific projects he lost interest quickly.

Some may read my post and judge my son to be an unimaginitive drudge without capacity for creative thought. He isn't that at all. But he has been conditioned by Lego, through Lego products, to treat Lego as a step-by-step construction project, much like a 3D jigsaw puzzle.

Lego might as well print on the box "No Imagination Required!" on all their products.