LEGO: From Toy to Investment
The main driving force for value increase in Lego sets is that Lego “retires” or discontinues sets, which is another way of saying that when Lego stops producing a set, it becomes rare as more and more are sold away to collectors and enthusiasts in the after market. Applying the law of supply and demand, once Lego stops making and selling a set, and the supply becomes limited, it can increase in value if the demand remains high. Why does Lego retire sets? According to Lego’s website, “Our Product Developers in Denmark invent new LEGO® toys all the time. They spend hours trying to create models that are better and more fun than ever before. This means we sometimes have to stop making a few of the older sets and our selection does change regularly.” In other words, Lego innovates. Resources are not limitless. Therefore, Lego has chosen to sacrifice older sets for newer and more interesting sets. Innovation can include many dimensions. For example, innovation can be based upon theme or topic; in other words, Lego may decide to start building upon a new popular entertainment series. Lego started making Harry Potter sets in 2001 and Marvel Universe sets in 2012 based upon growing popularity of those franchises or series. Other types of innovation are technical in nature. For example, Lego often creates models with moving parts, which is especially common in their Star Wars, Speed, and Technic sets (e.g., moving car parts, moving space ship parts like doors and weapons, etc). Lego makes improvements on moving parts.
It is readily understandable why supply becomes limited when a Lego set is retired. However, it is not entirely clear why demand for a Lego set remains strong or even increases after retirement. A Lego set may be desired (leading to strong demand) for many reasons. As a general matter, some collectors simply must have exactly what they want (if not everything). Others simply have a case of “Fear Of Missing Out” (FOMO) in the profit race. Other reasons for demand include the nature of the Lego theme or series (referred to by Lego as “Theme” e.g., Star Wars, Marvel, Harry Potter, Technic, Architecture, etc.), or the content (e.g., the model or the minifigures included with the model). For example, in my experience, the demand hierarchy for Themes is as follows: Star Wars>Marvel>Minecraft>Technic>Other. This is in part likely due to Star Wars and Marvel having a larger fan base than the other Themes. Some characters, scenes, or collection sub-types are also significantly more coveted than others. For example, the Lego Star Wars Helmet Collection kicked off in 2020 and has been very lucrative as an investment, especially for some of the original helmets that have been retired. The helmet sets were generally sold at MSRP for $59.99 on their release. As I compare sales in the secondary market (e.g., Ebay) to MSRP prices to evaluate the potential for investment, this article will mostly refer to sales for Lego sets that were sold brand new on Ebay in excellent condition, unless otherwise indicated. A collection of four Lego Star Wars helmets in Fig. 1 below (all retired as of 2022) recently sold for $600. The Tie Fighter Pilot helmet in Fig. 2 below (75274/released 2020/retired Jan 2022) from that listing has the greatest value, selling on its own for $279.98. The Stormtrooper Helmet (758726/released 2020/retired March 2022) recently sold for $159.99. Interestingly, the Boba Fett Helmet (75277/released 2021/retired Dec 2022), who is definitely a Star Wars fan favorite, has not significantly moved up in price even though it has been retired for a little more than a year. Therefore, even within a sub-type (the Star Wars Helmet Collection), some sets are more coveted than others.
A specific star wars scene that has been very successful in the secondary market is also one of my favorite scenes from the Star Wars saga – the Rancor Pit. Any avid Star Wars fan recalls Luke Skywalker being dropped into the Rancor Pit, and throwing a rock at the gate control to break the gate control and cause the gate to fall on the Rancor, crushing it to death. The Lego Rancor Pit (75005/released Jan 2013/retired Dec 2014) had an MSRP of $59.99 upon release. The Lego Rancor Pit set has recently sold for $299.97.  According to at least one online source, the value is around $322 and the annual growth is around 11.83%. The Rancor minifigure shown in Figs. 3-4 below has value of its own in used condition at $150 without the rest of the set. Lego also advertised that the Lego Rancor Pit could be connected to the Lego Jabbas Palace (9516/released June 2012/retired Dec 2013) by indicating “Combine with LEGO® Star Wars™ 9516 Jabba's Palace for a stackable scene with a trapdoor into the Rancor Pit! Includes rancor, skeleton and 3 minifigures”. Even more interesting is that some crafty Lego afficionados figured out a way to modify the Lego Rancor Pit and Lego Jabbas Palace sets to fit together more nicely, and in so doing, created a more value and demand for both sets. As a result, the two sets are now selling together in the $700-$900 range. Recently, one eBay listing of the combination sold for $899.83.
As we have seen from the value of a used Rancor from the Lego Rancor Pit set, the Lego minifigures also often carry significant value by themself. In the Marvel universe, one minifigure that carries significant value is Vixen. It was released as an exclusive at San Diego Comicon, and has recently sold for $249.99 largely in part due to its limited production and rarity. It was given away to winners of the instant drawing giveaway. This exclusive set was available for limited purchase to attendees of the San Diego Comic-Con that won the daily raffle. However, some Star Wars minifigures have earned the prize for greatest value in the thousands, such as for example a Yoda minifigure with an “I love NY” T-shirt that was released at the Times Square location in New York City in 2013. It is no surprise to me that many of the top-valued minifigures are from the Star Wars Theme since as previously mentioned, Star Wars Theme tends to drive greater demand.
Of course, there are also other obvious factors that affect supply which are less common. Any time a product is developed with a mistake, error, unintended or other unique characteristics (e.g., misprints, stickers mistakes, manufacturing mistakes, etc), it contains an inherent uniqueness or rarity that results in a much smaller supply for the public. Collectors are always looking to grow their collections with such rarities. One minifigure was recently sold in used condition on Ebay for $214.50 with the following advertisement: “This unique LEGO Star Wars item features a rare misprint on Captain Rex's helmet, giving it a one-of-a-kind appearance. The Phase 1 downshifted print adds to the collectible value of this toy, making it a must-have for any Star Wars fan or LEGO enthusiast.” The value for this minifigure is derived from a combination of the general value of the Star Wars Theme, the rarity of the minifigure, and the rare misprint which gives it a one-of-a-kind appearance.
It's interesting to note that even multiple variations of certain sets have all found growth, such as for example Boba Fett’s Slave I ship (7144, 6209, 8097, 75060, 75243). The original Slave I (7144 – 166 pieces) was released in 2000 with an MSRP around $19.99 and recently sold for $225. 6209 (537 pieces) cost $49.99 MSRP and sold around $400 in December 2023. 8097 (569 pieces) with an MSRP of $79.99 recently sold for $178.50. A much larger and more advanced version of Slave I (75060 - 1996 pieces) was released in 2015 at an MSRP of $199.99 and recently sold for $499.95. Finally, 75243 (1007 pieces) was the 20th anniversary edition with an MSRP of $119.99 and recently sold for $189. We see a clear trend that collectors want to have all of the variations of Slave I, or in other words, there is plenty of demand for all of the retired variations of Slave I. Future releases of Slave I could continue to be lucrative investments based on this pattern. By contrast, many of the older Star Wars Tie Fighter sets have sold under $100 on ebay (e.g., 9492, 75101). 75211 is only selling between $140-$160. With the exception of 75095 (which appears to have garnered significant value for $360), the majority of the Lego Tie Fighter sets are simply not as coveted or as in demand as the older Slave I sets, suggesting that Star Wars fan preferences might be a deciding factor in demand and value in the world of Star Wars Lego.
Pokemon and comic books are analogous investment types (albeit, in some cases, significantly more lucrative). Some Pokemon first editions with certified condition ratings like the Holo Charizard in Fig. 5 below are valued in the hundreds of thousands of dollars. There are also promo cards like the Illustrator that once sold for $5M. Some comic books like the special edition of Fantastic Four in Fig. 6 are valued in the tens of thousands. The value of these collectibles are all governed by the same supply and demand principles which are all heavily driven by rarity and demand. There is no time machine that can take us back in time to buy these cards or comics before they are sold out and/or retired. Collectors do not have a choice.
There are many free online tools (e.g., websites like BrickEconomy.com) and community information (e.g., Reddit, facebook groups) to track Lego MSRP pricing, after market pricing, release dates, retirement dates, and other Lego-specific information, etc. One common practice is to keep track of sets that are retiring and buy them on sale when retailers empty their shelves or warehouses at discounted prices.
However, there are some costs and risks with Lego investment. Like any other collectible, a potential buyer wants an item in the condition promised by the seller (typically, mint or excellent condition for high valued collectibles), which means that the item must be stored in appropriate or ideal conditions (e.g., dry and clean smoke-free environment). For example, it would not be a good idea to keep a Lego set in a basement due to moisture. Lego sets can be damaged at home as result of water or heat if they are not properly protected. Moreover, investing in Lego sets requires holding onto the sets (sometimes very large and bulky boxes) for many years e.g., 5-10 years. As one can imagine, there is a resource cost for space for maintaining or storing Lego sets. Most homes do not have sufficient space for large collections of Lego sets. Long-term storage of large Lego collections in ideal conditions (temperature-controlled lockers or storage units) can be expensive. Also, a potential buyer on Ebay expects perfect tender. In other words, the item has to be packed and shipped very carefully to ensure it arrives unharmed. A seller is responsible if the item arrives damaged. Ebay is generally on the buyer’s side in most cases – if there is even a scratch on the box when it arrives, the buyer can request a return since the item did not arrive as described in the listing. Valuable Lego sets are regularly shipped in bubble wrap with insurance to cover potential loss or damage. The seller’s responsibility for the shipment is only relieved once the tracking information indicates that the item has been delivered.
At least one study has recently proposed that “LEGO investments outperform large stocks, bonds, gold, and alternative investments, yielding an average return of at least 11% (8% in real terms) in the sample period 1987–2015”. Lego investment may be a bit safer than other investments like stocks for example. Much like the stock market, a Lego investor can take high risks and low risks. For example, an investor can buy a Lego set at a very low price before it retires or upon retirement, thereby risking only the initial investment below MSRP (which in many cases isn’t a risky investment since most sets will at least hold half of their value if not more). However, much like the stock market, buying a Lego set that is already valued at 150% could lead to significant losses based on both market conditions (e.g., recession) and risks such as maintaining the item in mint condition. Therefore, Lego investors should be careful about taking unwarranted risks (e.g., buying or chasing very expensive sets because of “FOMO”). Unlike the stock market however, it is unlikely that investing in a Lego set will result in a catastrophic or total loss (e.g., like a business that goes bankrupt) as most total loss situations (e.g., water damage, fire) can be mitigated with reasonable precautions and home insurance. In other words, a Lego investor has significantly more control over the investment with self-instituted precautions or mitigations, whereas the value of a stock can depend heavily on the capabilities and actions of someone else (i.e., a company management team) as well as worldwide events (e.g., politics, economics, etc).
By: Yan Glickberg
 New series have been released such as Lego Ideas, Lego DOTS, and Lego Icons, but it is too early to tell how much demand these new series will drive
 The value of goods can obviously vary based on condition including general wear and tear with higher value being allocated to items in mint or excellent condition