Lego and Tencent Joins Power To Develop online Games For Chinese Children

Sets of Lego bricks are seen at a toy store in Bonn, Germany, September 5, 2017. REUTERS/Wolfgang Rattay

The Danish toymaker Lego and Chinese internet experts Tencent teams up to develop online games for children in China.

The difference between the two companies is that Lego experienced poor sales growth in the past few years while Tencent has had its sales grow between 25-30 percent in the year 2016.

Reasons For Lego And Tencent Partnership

On Monday, Lego reported that the partnership between the two aims at creating an online friendly environment and platform that is safer for the children. Currently, Tencent is the largest gaming and social network company in China with a valuable market capitalization of $537 billion.

The partnership will see the development of Lego video games that will be played on Tencent’s platform.  Also, the company plans to develop branded licensed games that will reach out to kids.

Jacob Kragh, head of Lego in China gave a statement saying that Chinese children are more active in the digital world. Therefore, the partnership is not only going to bring them safe online environment entertainment but also digital Lego information that will enhance their learning needs and sharpen their skills.

Moreover, the company also announced the development of Lego Boost. Lego Boost is a brick building and coding set that lets children turn it into moving objects.

According to Euromonitor International’s report concerning the Chinese market, Lego owns about three percent of market shares in the country. Mattel (a multinational toy production company headquartered in California) owns about two percent. And Hasbro, also a multinational toy production company (headquartered in Pawtucket, Rhode Island, US), has one percent of shares in the market.

Alibaba Group Holdings Limited, a Chinese online electronic commerce giant and BabyTree, an online content developer last year made a striking business deal with Mattel. The deal was to sell interactive learning products for children.

In 2016, Lego set up a factory in Jiaxing, China, which aims at producing between 70 to 80 percent of all Lego products in the Asian market.