Lego, the Danish toy maker, once captivated the dreams of children across the world. It was the envy of all in the games sector. Yet at the height of its success it stood still whilst others around it...

Lego, the Danish toy maker, once captivated the dreams of children across the world. It was the envy of all in the games sector. Yet at the height of its success it stood still whilst others around it were busy innovating. During the late 1980s and early 1990s electronic games started to appear in the market. At this time, Sega and Nintendo introduced electronic games at the top end of the market. Lego’s executives saw them as an irrelevance: they were selling expensive games to teenagers and not to their market segment. As prices came down, the target market became younger. It took Lego quite some time to awaken to the reality of the threat it was facing, and by the mid-1990s, it remained far behind its competitors, despite significant reinvestment. Lego now licenses its products and brand to more established electronic games providers.