Lego Partners China’s Tencent For Online Games

Lego toys is teaming up with Chinese internet giant Tencent Holdings to jointly develop online games and potentially a social network aimed at Chinese children. Lego has seen a slowdown in sales growth in recent years (mostly due to very high prices and fledging interest from the younger kids), but the Chinese market has been a bright spot with sales growing 25-30% in 2016.

It is competing with Barbie maker Mattel and Hasbro, the firm behind My Little Pony, for a slice of the USD31 billion toys and games market in China.

Lego said on Monday the partnership with Tencent, China’s biggest social network and gaming company, aimed to create a safe online environment covering content, platforms, and experiences tailored for Chinese children.

The partnership includes developing a Lego video zone for children on the Tencent video platform, as well as developing and operating Lego branded licensed games, the toymaker said. It also includes LEGO BOOST which is a building and coding set that lets children turn their brick creations into moving objects and will explore developing a joint social network for children in China.

Lego has about a 3% market share in China, followed by Mattel and Hasbro with around 2% and 1%, respectively, according to Euromonitor International. In November 2016, Lego opened a factory in Jiaxing, China, which it expects to produce 70-80% of all Lego products sold in Asia.