Star Wars was the first Lego license — 25 years later, it's stronger than ever

• Disney's Star Wars and Lego are celebrating 25 years of partnership.
• The team-up was the first time Lego had struck a licensing deal and became a framework for other franchises.
• Since 1999, Lego Star Wars has grown to become its own universe, with video games, apparel and more.

If you are a Star Wars fan, Jens Kronvold Frederiksen may have crafted your childhood.

A design director at the Denmark-based Lego company, he has spent the past 25 years creating Lego Star Wars sets.

"I went to my boss and said, 'Hey, you need me on this product line,'" Frederiksen told CNBC. "For me, it was just like a dream come true. Star Wars and Lego together, two things I love."

Frederiksen is not the only one. Since 1999, fans have rallied around the license, scooping up everything from Darth Vader mini figure keychains to $850 Millennium Falcon sets featuring more than 7,500 pieces. The brand has also grown to include half a dozen video games and a slew of animated content on Disney+. It also now has its own home on Epic Games' popular online game platform Fortnite.

The Star Wars license was the first of its kind for Lego, which had never created an official product line tied to licensed intellectual property before. In fact, the Jar Jar Binks mini figure was the first ever to feature a custom head sculpt instead of one of Lego's iconic round faces, Frederiksen said.

Now, Lego Star Wars has become a blueprint for the company's other brand deals — think Harry Potter, Batman and Marvel's Avengers.

"We were creating themes, but we weren't always necessarily connecting those with the deeper story," said Jill Wilfert, head of global entertainment partners and content at Lego. "And I think for us really seeing that unlock, and how it really allowed people to open up their imaginations in a different way and express their creativity in a different way, is I think what Star Wars did for us."

Wilfert, who has been with Lego for 36 years, said there was a lot of trepidation at Lego prior to the Star Wars deal about doing any kind of third-party licensing.

"Once we saw how well it translated and how people responded to it, it really did give us more confidence," she said.

The Lego Star Wars collaboration came at a time of financial turmoil for Lego. In the early 2000s, the company was dealing with high debt, stiff competition from digital gaming platforms and a portfolio that had become too diversified. Lego was on the brink of bankruptcy.

Strong sales of Lego Star Wars as well as the Lego-owned Bionicle franchise helped keep the company afloat while it reduced its product lines and shut down noncore businesses. In 2005, the company launched a Lego Star Wars video game.

"It's been hugely successful and continues to be successful today as a gaming franchise," said Paul Southern, senior vice president of third-party commercialization and franchise development at Disney. "It created the world."

A Force in the toy aisle

Two decades later, Lego Star Wars remains one of the top-selling brands for Lego and the company sees strong sales even when there are no new theatrical releases tied to its product.

The privately held company provides biannual glimpses at its balance sheet. In March, Lego reported that it grew sales 2% in 2023, even as the global toy industry saw sales slip 7%, according to data from Circana.

The toymaker once again cited Lego Star Wars as a driving force behind those sales. Lego Icons, Lego Technic, Lego City and Lego Harry Potter also performed well.

Although it was a smaller gain than previous years — the company saw overall sales jump 27% in 2021 and 17% in 2022 — Lego has continued to snap up market share in the toy industry. Much of that has to do with the fact that brands such as Lego Star Wars appeal to multiple demographics and generations.

Lego sells sets at a variety of price points and difficulties, allowing kids to put together smaller, less complicated models and act out scenes from the franchise, while hardcore collectors can build more detailed replicas of their favorite ships, helmets and movie moments.

The evergreen nature of the franchise is key. Lego can draw on nearly 50 years' worth of content to delight consumers of all ages.

"The main thing for us, of course, is that this is for kids," Frederiksen said. "The model should be really fun and creative and inspiring to play with, but it should also be a great building experience."

That is why Lego takes some creative freedom with the sets that it offers. For example, an Imperial Shuttle is almost completely white. However, giving customers a pile of white bricks would make it "impossible to find the pieces and would not be a fun building experience," he said. So, Lego offers some variation in the brick colors and details.

While Frederiksen is not designing products anymore, he still builds everything. It is important to him to experience how each set comes together.

To celebrate the 25th anniversary of the Lego and Star Wars partnership, as well as the 25th anniversary of "The Phantom Menace," Lego is releasing numerous special sets. There is the TIE Interceptor model that retails for $230, a Mos Espa Podrace diorama for $80, a Droideka model for $65 and new BrickHeadz characters for less than $10 each.

"What we see a lot with properties and with Star Wars, maybe more so than others, is it's something that families do together," Wilfert said. "Often, you're first introduced to Star Wars through a parent, your parents grew up loving Star Wars, and we just see that having things in our portfolio that allow those connections and allow families to connect together, we're really seeing the relevancy of that."

With new digital products such as video games and Fortnite, Lego can engage with younger consumers.

"We are trying to make sure that we are in relevant places where we know kids are occupying their time," Wilfert said.

An even bigger galaxy

The Lego Star Wars brand has evolved to encompass more than just bricks and mini figures — it has become its own ecosystem, said Southern.

"The world of Lego Star Wars sits as a separate identity within our overall business, and that makes it very unique," he said.

Southern was at Lucasfilm when the partnership with Lego and Star Wars launched. He transitioned over to the Walt Disney Company when Lucasfilm was acquired a decade ago, so he has seen Lego Star Wars' growth firsthand.

Part of that growth is the humor that has become associated with the Lego Star Wars brand. This includes slapstick moments in video games and in animated content.

"We've established an ecosystem and a tone of voice that allows us to do things, which, ultimately, are kind of a little bit cheeky, a little bit more fun," Southern said.

And that humor has extended to other franchises.

"Star Wars, you know, allowed us to really open up people's eyes to how Lego can create humor and charm to an [intellectual property] that might not exist," Wilfert said. "We found that most of the IP owners are pretty willing to kind of let us play a little bit."

Between video games and animated projects, Lego has worked with franchises such as Harry Potter, Indiana Jones, Batman, Pirates of the Caribbean, Lord of the Rings, Marvel, Jurassic World and Pixar's "The Incredibles."

But it all started with Star Wars, which keeps growing.

"We've taken the passion that the fans and the kids have for that brand and we've taken that into other areas," Southern said, noting, that along with video games, Lego Star Wars can also be found in the publishing section and even in apparel.

The diversity of product and its strong sales led Disney and Lego to extend their contract for Star Wars through 2032.

"The relationship has gotten easier because there are people who have been working on both sides all the way through the relationship," Southern said. "They're like family now. It's very frank, it's very open, very collaborative."

The long license lead time allows Disney and Lego to work together on long-term projects such as video games and animation, as well as celebratory sets for major anniversary milestones.

"We're celebrating 25 years of working together," Southern said. "One of the things that is super important, too, is that we expect to be here in another 25 years, celebrating the way we've evolved our relationship and made it relevant for the generations to come."