What is the ACTUAL cost of licensed LEGO themes?

The price markup for LEGO themes like Disney, Star Wars, Harry Potter & more is SHOCKING

If you're ever wondered how much of a markup we pay for LEGO licensing for themes like Disney, Harry Potter, Star Wars & More, you'll be happy to hear we did the math and actually determined what percent increase we are paying to be able to have LEGO sets that include Mickey Mouse, Luke Skywalker, Ron Weasley, and other characters we love! This is not a perfect analysis, but it is useful and a very interesting insight into what licensing costs actually are and how they impact the price of a LEGO set.

Next, we examined the average price per piece for LEGO's own IP (Friends, Ninjago, City, Creator Expert, etc) to get a baseline for what LEGO sets cost without having to take IP into account. This was followed by an up-close view of Disney IP sets (Marvel, Disney D2C, Disney Princess, Star Wars) to see a range in cost for each of those themes since I assumed this would be the most expensive IP. The final plot we look as was a plot of all of the licensed LEGO sets compared to LEGO's own IP to see how they vary.

Finally, we examine the actual percent markups in a table. This is given as a range because we used three types of averages. This is done for all of the parent companies from which LEGO uses IP including Nintendo, Disney, Dreamworks, Warner Brothers, Universal Studios, and Microsoft. The overall range in percent markups for some licensing was absolutely insane, and some of the licensed sets have just about the same cost as LEGO's own IP.

This analysis is not perfect and there are other things we could take into account in the future, time permitting. Additional factors that could impact the price per piece of a LEGO set include new molds, number of minifigures, color of pieces, type of pieces, size of pieces, and overall weight of a LEGO set.

If you found this type of analysis useful or informative, please let us know what you thought about it in the comments below. If you have any suggestions for future analyses we could do on LEGO sets, I'd love to hear them. Thank you for watching!

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CHAPTERS:
00:00 Intro
01:04 What is Intellectual Property?
02:03 Data, Methods, and Assumptions
03:03 Calculations (Averages)
04:13 Cost of LEGO's own IP
09:01 Cost of Disney IP (Disney, Marvel, Star Wars)
10:37 Average Cost of Each LEGO Theme
15:30 Actual Percent Increase By Theme
19:09 Discussion/Final Thoughts

[darkskybuilds]

I'd be interested in seeing how product weight impacts this type of chart.

[cheeseontop]

No standard deviation with the mean instead? The draw to Universal Jurassic World are the large Dino’s, unrelated to IP. If another theme had large molds like that it would also be the highest regardless of license

[galaxyace]

Whoa nearly 40% more for some Star Wars Sets that is absolutely insane but I can really feel that *General Grievous Starfighter *Imperial Shuttle

[andrewnixon]

I love numbers and math and thanks for looking at this.

I think, and could be wrong, that the reason the numbers are so high for the Jurassic World sets is more for the large, new molds for the dinosaur pieces. There are some examples of this in all (or most) themes, but all of the Jurassic World sets include these. So I don't think their licensing fees should be considered the highest based on the price per piece comparisons. If I had to guess, using both a combination of your data and taking things like the cost of making the new, large dinosaur molds...that likely Disney has the largest licensing fees...which wouldn't really surprise most folks.

Your data does help confirm my anecdotal thought about the Harry Potter sets being an above average deal, especially for a licensed sets. I feel like their sets include a good amount of part variety (large, small, custom pieces) and minifigure variety.

Not surprised at the better deal on Minecraft. No idea on the licensing fees, but they use so many small, more common parts and even the molds for their minifigures rarely change...so seems like production cost should be lower on those sets to me.

Thanks again, I love looking at and crunching numbers. You went even deeper than I have. Most of your data skews towards what I was thinking from personal observation.

I just think those large dino molds for Jurassic World skew the price per piece data too much for an accurate comparion based on that...not even sure how to adjust it, but glad I've picked up some of those sets on clearance. I've not really been a fan of the sets, but I really do like the dinos themselves.

[Goodall]

Interesting that Speed Champions ends up being on the cheap end, since they should be paying licensing to the car manufacturers.

Love this kind of data analysis. Really interesting stuff.

[williamdunbar]

I use both price per piece and price to volume of stuff to quantity the value of a set

[BrikFam]

This univariate analysis on PPP (price per piece) is interesting but the conclusions drawn speak for themselves: intervals spanning up to 63 points suggests additional variables need to be considered to lower overall variability and be able to identify something as blended as a licensing fee. Enter multivariate analysis.

No doubt LEGO applies multivariate techniques for their own price targeting; I remember for example a recent justification (direct from LEGO) of the high cost of the latest Grievous set was because Grievous himself was an expensive part to produce.

Other variables to consider for more in-depth analyses (all of which are possible but not easily obtained) could be

a) the relative size of the parts used in a set (you mentioned the boat hull in one City instance). DOTS are plentiful but tiny, and in this kind of analysis would therefore be considered exceptionally cheap. DUPLO on the other hand has few pieces but is on average gigantic, so would show as exceptionally expensive here. A normalisation function to account for piece sizes would be one input. Jurassic sets often include large dino parts;

b) The uniqueness of elements. Many sets in the City range for example utilise new parts not found anywhere else or (in my experience) are used as testing grounds for other themes. Many of the Technic and Creator Expert sets also invest in new part moulds. Create a mould for a new part for one set, and that part is expensive because it is only produced maybe a few hundred thousand times given the cost of the production input. Include it in a dozen sets and it is made a few million times, so its overall production cost (and availability for other sets) is lower. Same deal for Jurassic dinos and City roadplates or boat hulls here, but also new minifig designs (where are you going to find an Ithorian outside Star Wars?);

c) Soft costs like box and manual sizes;

d) Longevity of the theme may play a role. Are evergreen themes more invested in and experimented with, or are one-offs more risk-friendly?

e) Perhaps using the Classic line as a reference standard may offer some stability.

That is all I can think of off the top of my head. Now you got me thinking about Principal Components and Interpolation. I am supposed to be on parental leave!

— MeisterDad.

[Erikve]

I really like the approach and enjoyed the video very much. Definitly some interesting learnings.
Small improvements for the linear fit if you would redo in future:
1. I think you have forced the intercept to be 0: a set with 0 pieces would have cost you 0 euros.
2. After fitting you should remove the outliers and do a refit. This would prevent the slope to become dominated by outliers.

[SHYTIMEismyTIME]

Wow... now this is useful information. Thanks for the work guys... now we have a source for future arguments. You’ve done community a good thing.

[markginesi]

You should probably drop small sets, where the packaging and manufacturing costs dominate, and really large sets, where the high piece count skew the results. You're addressing this by looking at the three variables of median, mean, and slope but I think if you looked sets in the middle 50 to 75% range with regards to size, your three variables will come together. I made the same observation about the Colosseum price per piece but I realized it was also cheap because it had very few colors, specialty pieces, or large pieces. When making the Colosseum I felt that almost any MOC AFOL with a lot of tan bricks could have easily reproduced it except for the connecting ball and socket joints.

[Maya_Ruinz]

Makes sense really, you can see the price difference pretty glaringly in the aftermarket as well. Just look at the price of retired Jurassic World, Star Wars and LOTR sets, minifigures and pieces. Almost made me want to write those themes off entirely for collecting, I personally have chosen to stay with Lego's own brands and just collect certain licensed minifigures as they are released.

[StormX]

I was always super suspicious about Lego Star Wars being overpriced! I remember the battle packs used to be $9.99, but they increased to $14.99 over time!

[noutd]

I’ve been following you for a short while now and found this video just now. Super interesting as I really love Lego and also data analytics (educated in data and AI myself). So cool to see those two interests combined in one video, and I think it’s awesome that you manage to combine those topics yourself in a vide like this so well!! Thanks so much for that.

On the outcomes: Such a small markup for Warner Bros! Could that also be because of the fact that Harry Potter LEGO sets have been so popular, and well represented in Lego sets throughout the years that it maybe has had a larger run (/edition) in amounts made per set? And maybe that’s why they don’t need to pay that much IP per set, because in total they earn a lot because of HP being that much more popular throughout the years? (This is a hunch, I don’t actually know the amounts sold per theme or set. Would be interesting to look those up too.)

[cherylaldred]

I absolutely love this video! Thank you so much for doing all this math to help me budget better and buy sets more worth my money!

[NewEnglandIV]

Yup as a huge LEGO Star Wars fan and a college student with a tight budget I always wait for at least 20% discounts or x2 VIP point promos and GWPs.

[SNOTokay]

This was fun! Cool to geek out over LEGO-related data, but I REALLY want the calculated values to be presented in a Box and Whisker plot instead due to your focused findings. It would be interesting to run an ANOVA on the set price per piece values within the Disney IP umbrella, Dreamworks and Warner Bros. could be simple T-tests if it's just those 2 brands within each holder, and then another ANOVA across all IP holders.

[ator]

Great video! Good use of statistic control tools and easy to read charts. I really enjoyed it!!

[ianbrickbod]

Jang talks about the fact that themes don't pay for their license, LEGO can spread the cost across all themes however they want (don't know his source for that). So what you actually look at is how much LEGO think they can get away with charging, ie kids whining they want a disney set means LEGO know they can charge more as parents will give in.

Minifigures also skew results, that's why speed champions are better value as they don't have minifigures. Speed champions does have licensing costs, but again they could easily be covered by overpriced disney sets.

[kirbykrbz]

Larger and smaller pieces skew the data. An example is universal sets appear to cost more, but in reality they use more plastic to make the dinos. Another example is how speed champs seem to be good value but in reality they are using a lot of small parts, same for coliseum. I think the only way to compare sets is by weight of plastic. It's not perfect as I'm sure there are design costs or some parts are pre-assembled, but it's better then price per piece. Then you may actually see the real licensing costs show up.

[batsamd]

Interesting video, really surprised to see how cheap the WB license seems to be. Of course right now there isn’t much in the way of DC sets, wonder how the graph would change if LEGO would actually produce some DC sets.
Always heard City was expensive, which your data seems to corroborate, I was always interested to see what City sub-theme was more expensive, the usual police or fire sets or is it the rotating sub-themes, space, water exploration, coast guard or some other sub-theme?