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Case Study

LEGO in the age of digitization (A)

By Carlos Cordon, David Shapiro, Lasse Snejbjerg, Michael Stenderup and Aliya Azimova

20 pages

September 2017

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Reference: IMD-7-1924

The “LEGO IN THE AGE OF DIGITIZATION” case is in two parts. Part A provides an opportunity to follow the developments of the LEGO Group in the digital gaming arena. It focuses on the “failure” of LEGO Universe, the LEGO Group’s first Massive Multiplayer Online Game (MMOG), versus the success of Minecraft, launched by the start-up Mojang. The LEGO Group followed the traditional waterfall process of sequential phases: design, development, testing and commercialization. The company experienced the issues of partnering with a development studio located in Colorado, far away from the Lego Group’s HQ. That caused problems in aligning on the image, branding and safety of the game versus the LEGO Group’s values and selling proposition. After years of development, LEGO Universe was finally launched in 2010, but failed to meet the Group’s ambition for it to become a second core business. By the end of 2011, a decision had to be made on whether to continue LEGO Universe or to close it. In contrast, Minecraft followed a very different development pattern that could be described as agile, where early users did testing and provided ideas for further development. In addition, the start-up followed a more usual digital pricing scheme of initial low price and add-on purchases. The success of Minecraft is even more in contrast to LEGO Universe because both development projects started around the same time, building on a very similar gaming concept and user experience, but with very different means and development approaches. Part B is an epilogue to Part A. It describes the LEGO Group’s decision to close the LEGO Universe game, its learnings on how to embark on digital together with partners, the need to internally develop a unit to manage these partnerships and the conclusion to adopt a “hybrid” approach between waterfall and agile development.

Learning Objective

To understand agile methodology vs. waterfall methodology.
To learn the challenges for a traditional company moving to agile.
To understand how customer and user behavior could facilitate or hamper the use of agile methodologies.
To understand the role of traditional/incumbent companies in the digital ecosystem.
To understand different business models to make profits in the digital business.

Keywords

Strategy, Marketing, Digital Transformation, Information Technology, Game, Agility, Partnership, Intrapreneur

Settings

World/global, Denmark
Lego Group (The), Consumer Goods, Toys and Games
1996-2017 with a focus on 2008-2012

Type

Field Research

Available Languages

English

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This case study is part of a series

LEGO in the age of digitization (A)
LEGO in the age of digitization (B)

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