What Is Up With Lego's Pricing? - Part 1

I have heard this question or some version of it a lot lately.  From the mother buying the birthday present in the store, to the kid whose allowance is not enough to get the set they want to the collector bemoaning how their monthly "Lego budget" (yes some of us as adults have line items in our budgets for Legos) just doesn't go as far as it used to; everyone is lamenting this change.

Recent events have given me a unique perspective on this question.  Lately I have been working on rebuilding all my Lego sets in preparation for my children to start playing with them in a few years.  They are too young now but with as many sets as I have to resurrect after having been disassembled for well over 15 years I figured I better start early.  I'll write more on that process in a later entry.  In the course of doing that I have seen, in quick succession, sets from a variety of times and places in Lego's history over the past 30 years.  And for me, what I have seen has answered the question of what is up with Lego's pricing. 

Look at the following two pictures.  The first is of the 2004 version of the Millennium Falcon and the second is this most recent version released just this month (July 2011).

Ok so what do we see in these pictures?  In short that nothing much is different between these two sets.  They are constructed in very similar manners, share many identical pieces and have almost exactly the same interiors (you can't see that in these pictures but it is true).  The latter does have approximately 250 more pieces but they are all very small; for all practical purposes these are exactly the same model with only a few minor cosmetic differences.  There is however, one major difference: cost.  The 2006 version cost $100.00 which felt very reasonable for the model that you got, this latest version?  $140.00. 

Another great example is the last two castles, 2007's King's Castle Siege and 2010's King's Castle.  These two sets cost exactly the same price ($100.00) and have almost identical piece counts but it doesn't take Sherlock Holmes to see that the 2010 fortress is far smaller than its predecessor from a mere 3 years ago. 

Many look at discrepancies like these (I could go on for pages listing examples from every theme) and decry Lego for gouging.  "Those evil corporate profit mongers and their bottom lines are the cause of this!" cries the indignant collector as he painfully forks over a wad of cash for a single set that would have bought him two just a few years ago.  Is this what has happened?  Has a company that has long been marked by its fairness and goodness in the marketplace finally fallen to the monster of corporate  greed and profit at all costs?  I thought so but then I started rebuilding and, almost against my will, my opinion changed.  Lego sets are more expensive but it isn't corporate profits that are driving it.  What is driving it is a monumental paradigm shift which I shall describe in my next entry.