Collectors’ Corner: All systems LEGO

lego on shelves

News & Insights

MoneyPlus Features Team

5th May 2016 at 3:57pm

LEGO is no longer just for kids. Like superhero movies, comic books and Star Wars, it’s moved beyond the school gates and is now cooler than ever. Young LEGO fans from the 70s, 80s and 90s have grown into adults and retained their love for the colourful plastic bricks. They even have their own name: “Afols” (adult fans of LEGO). The company, in turn, has responded by releasing LEGO sets specifically aimed at older fans, such as LEGO Architecture or LEGO Creator. Collecting LEGO is hip, whatever your age.

As the age span of LEGO fans increases, a completely new genre of fan has emerged – one that’s less concerned with playing with LEGO, building LEGO or following the carefully crafted instruction sheets laid out in each kit. These fans are dedicated to searching for obscure LEGO sets, collecting and selling them at profit. To them, LEGO is more than just a hobby.

We spoke to four Afols to find out more about this very particular type of LEGO fan, and to discover what drives their own passion for LEGO. What’s the enduring appeal of these small lumps of plastic, and what inspires people to continue collecting LEGO into adulthood?

Building a LEGO collection

Shelves full of Lego collectibles

Copyright Brick Picker

Max runs LEGO blog Brickd. He, like many others, has been a LEGO fan since childhood. Each time Max visited his grandparents in upstate New York, they would take him to the local toy store to pick out a LEGO set.  This comforting association means that now as an adult, Max finds building LEGO sets a wonderful way to relax. He became a collector almost accidentally when he found himself acquiring LEGO sets “at a rate that exceeded both my ability to put them together and also the real estate available in my house to home them”.

The child enthusiast who grows up to become an Afol is a familiar story. Thita at The Brick Blogger grew up in a large family, with parents who valued creative toys. The daughter of an architect father who sometimes used LEGO to model his work projects, LEGO was a huge part of Thita’s childhood: sets were given regularly for Christmas and birthdays, and passed down from sibling to sibling.

We chatted to the blogger behind The Plastic Brick, a web-based store for LEGO hobbyists, who describes his entry into the world of collectors slightly differently. Due to go to college soon, and consumed in the burst of nostalgia that often greets such life changes, he decided to go through his childhood LEGO collection and build it all again. He then began trawling through eBay – then in its infancy – looking for the classic sets he’d wanted as a kid but hadn’t been able to afford. The spark was reignited.

A Lego Star Wars Death Star

Copyright The Plastic Brick

It’s fair to say that the Internet has played a key role in the explosion of LEGO as a commodity. Casual LEGO fans browsing on eBay for sets they remember playing with as kids have gravitated easily towards BrickLink (a sales site not unlike eBay, but specifically for LEGO).

Ed, the final enthusiast we spoke with, is one such fan. Ed is the collector behind Brick Picker, a site dedicated to LEGO pricing and investing. Like The Plastic Brick, he stumbled back into the world of LEGO as an adult. Surfing the net with his brother one night, they came across the Star Wars UCS 10030 Star Destroyer set and Ed asked his wife to buy it for Christmas. Another Afol was born. When Ed’s wife became pregnant with their son, Ed stopped collecting. Picking up his hobby again two years later, Ed couldn’t help but notice that many of the sets he remembered had doubled or tripled in value.

According to Thita, in the early days of the Internet, BrickLink and eBay were used almost like forums, for “like-minded hobbyists to help one another out with their projects.” In such times, buying and selling was secondary. “Prices were fair – more like trades – and there was a feeling of community and friendship”.

But as LEGO started to release more licensed product lines – for example, Star Wars or Harry Potter LEGO – a new group was attracted to the community: collectors. Collectors were less concerned with playing with and building LEGO, and more interested in gathering display sets and mini-figures. Serious collectors began buying LEGO, inflating the price of discontinued sets and mini-figures. The emergence of a viable market attracted the attention of more general investors. Thita explains this final group had little or no interest in “playing and building, but were mostly focused on making money with the latest hot item”.

Is LEGO valuable?

The colourful building blocks have their origin in 1930s Denmark, where small-town carpenter Ole Kirk Christiansen started making wooden toys in his workshop. In 1949 his company, by then known as the LEGO Group, produced an early version of the interlocking bricks we recognise today, although it took almost ten years for the design to be finalised and patented. The name LEGO evolved from the Danish phrase ‘Leg godt’, meaning literally ‘play well’. Christiansen’s son, Godtfred, became the junior managing director of the company, and it was he who saw the potential for the simple blocks to become a system of creative play through their versatile locking ability.

What Godtfred did not foresee was the investment potential in his company’s toy for creative play. A 2015 analysis by the Telegraph newspaper[1] found that, since 2000, LEGO kits have been gaining value faster than gold!  According to the study, sets in pristine condition have been appreciating 12% annually. Gold, in comparison, ‘only’ returns around 9.6%.[2]

However, if you assume collecting LEGO is child’s play, think again. As with all investments, knowledge is power. Thita advises would-be collectors to do their homework on “sourcing the best deals, finding out what sells best and when.” Anyone serious about making money needs to know what the market wants. Max highlights two themes, ‘Octan’ and ‘Classic Space’, as being stand-outs for collectors. But as a general rule of thumb, themes with a strong cult appeal, such as Star Wars or Hobbit LEGO, increase their value thanks to their existing fan base.

Themes that have been discontinued or contain rare elements tend to be worth more too. Max refers to a unique shade of blue that only appears in sets featuring the shipping company Maersk: “Any time a brick has a unique quality, it increases its value”. Exclusive sets released in a particular region or country usually do well, as do very large sets. There’s a lot to learn though, so jumping in at the deep end is not advisable.

Looking after your LEGO

Many Afols with disposable income are drawn to the same LEGO sets they enjoyed as kids. With the majority of Afols aged 30 – 50, this means sets from the early 70s and onwards really hit the sweet spot, particularly those released post-1978, after LEGO introduced their now ubiquitous mini-figures. Nostalgia is a key factor; TPB explains that as “fans grow and gain disposable income, the investment market seems to grow with [them].”

However, he recommends trying to think like a fan and seeing which sets pass your own “cool test” when you’re looking to buy, rather than focusing on profit, metrics or data: “If you are engaged in what you are collecting, there’s probably someone else out there that’s even more engaged and willing to pay even more.”

One way to ensure the best return on LEGO sets is to treat them well. Unopened boxes, known to collectors as MISB (mint in sealed box), increase in value more than those which have been well loved, so it’s imperative to store sets well. This takes space; LEGO boxes are filled with a lot of air. Boxes play a large part in marketing the sets and make up a significant component of the collector value –  therefore collectors must guard against mice, mould and water when storing their LEGO.

 

A book case full of Lego collectibles

Copyright Brick Picker

And of course, the longer you keep LEGO, the further it increases in value. Thita likens collecting LEGO to handling a “piece of art, precious metals or jewellery.” It’s not like stocks. “You have to hold and store the items, and physically deal with them both when you buy and when you sell.”

Future proofing your LEGO collection

Collecting LEGO seems rosy for now, but will sets retain their value in the future? Thita believes the LEGO Group is trying to limit professional investors. She thinks the company have gotten better at judging demand and releasing enough sets to satisfy it, thereby driving down investment prices. The company’s habit of re-releasing updated and improved versions of the most popular sets and mini-figures has burst the bubble on the returns of the most sought after sets, since many collectors prefer the updated versions.

But wouldn’t more sets generate more interest? Whatever its thought on collectors, the LEGO group seem fully behind increasing the number of Afols. By expanding their range to include sets that specifically target Afols, the company are purposely tapping into this audience and keeping them onside. Explains TPB: “LEGO is doing a fantastic job of keeping their brand relevant to a broad range of age groups, which increases the value of all things LEGO.”

The 2014 LEGO Movie was a huge hit with young and old fans alike and there is already a sequel planned for release in 2017. Whilst the outrageous returns that have been outstripping gold investments may relent, the public appetite for LEGO shows no signs of abating.

Play well

If a child’s toy with a large adult fan base seems ironic, so too does Christiansen’s ‘play well’ concept when applied to LEGO boxes that sit for years unopened. Many fans struggle to reconcile the idea of purchasing an awesome LEGO only to leave it in the box, and the enthusiasts we spoke to were keen to distance themselves from hard-nosed investors like these.

The fans we met regard themselves as members of a LEGO community brought together by a common love of creating. “Ultimately LEGO is a toy”, states our contact from The Plastic Brick. “It needs to be played with and enjoyed to have long-term value.” Thita describes herself as a LEGO fan and a hobbyist, rather than a LEGO collector. She declares proudly, “There are no unopened LEGO boxes stashed away in our household; they all get built, played with or repurposed into other models.”

[1] http://www.telegraph.co.uk/investing/shares/lego-a-better-investment-than-shares-and-gold/

[2] http://time.com/money/4162059/LEGO-investment-compare-gold-return/

 

Other sources

http://www.theguardian.com/lifeandstyle/2014/feb/16/LEGO-rise-rise-little-bricks

https://en.wikipedia.org/wiki/LEGO