Lego Group is joining forces with Chinese internet giant Tencent Holdings Ltd. (0700.HK) to jointly develop online games for children in China, the latest move by the privately-held Danish toymaker to increase its focus on digital content.
Lego recently jettisoned its chief executive after just eight months in the job, appointing a younger leader with technology experience in a move it hopes will help it compete in an increasingly digitally-focused environment.
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Lego is grappling with slowing sales growth and competition from smartphone apps and videogames. It is locked in battle with Mattel Inc. (MAT), not only to be the world's largest toy company by sales, but to focus on modernizing toys for a digital era in which children spend more time on tablet computers and smartphones.
The company has launched an app that functions as a mini-social network, allowing children to share what they build online. It has also created Lego Boost, which combines computer coding with brick play, and is focusing on ways to use smartphones to bridge physical and digital play.
Mattel has also sharpened its focus on technology, naming former Google executive Margaret Georgiadis as its new CEO last year.
Monday's partnership deal with Tencent will see the companies jointly develop a Lego video zone on the Tencent platform that will develop, publish and operate Lego-branded licensed games.
The deal also allows for the publication and operation of the online operation system for Lego Boost and the companies will explore the possible development of Lego Life, a social network for children, in China.
Jacob Kragh, General Manager of Lego China, said "We've seen more and more Chinese children engage with the world digitally, and the partnership will bring them safe and imaginative digital Lego content that also supports their needs of learning, development and entertainment."
"Through the partnership, the Lego Group and Tencent will explore further initiatives to ensure digital safety management in each company, share best practices in child online protection and drive online literacy promotion."
Write to Dominic Chopping at firstname.lastname@example.org; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
January 15, 2018 05:21 ET (10:21 GMT)