Toy maker Hasbro aims new line to take chunk out of Lego

Toy maker Hasbro is joining the building-block fray with a new line called Kre-O that is compatible with Lego blocks. The first products feature popular Transformers characters like Optimus Prime and Bumblebee.

Kre-O, which will be launched in the autumn, is intended to grab part of the booming construction set business that Lego dominates.

The line will launch with 12 Transformers sets. Hasbro plans to expand Kre-Os to its other brands eventually.

Each Transformer set comes with two sets of instructions so the same bricks build the vehicle version of the Transformer as well as the robot version.

Kre-Os are one of thousands of new toys that will compete for the attention of children, and parents, on display this week at the American International Toy Fair trade show in New York.

Hasbro could use a hit. The company said earlier this month its net income slipped 16 per cent in the fourth quarter as US demand for toys dropped off late in the year.

BMO Capital Markets analyst Gerrick Johnson said: "Toy makers had a good year, but it wasn't the great year we expected."

That could make retailers more cautious about ordering this year, which makes it important to create early interest as a potential hot holiday toy.

Hasbro previously introduced a construction set line in 2003 called Built to Rule, but it fizzled out and was discontinued by 2005. The Built to Rule blocks didn't hold together well and some of the sets were too difficult for their age range, according to Hasbro chief marketing officer John Frascotti.

The Kre-O line, on the other hand, has better quality bricks and are compatible with Lego and the similar Mega Blocks, Frascotti claimed.

The new line makes sense for Hasbro, said Jim Silver, toy analyst at timetoplay.org, particularly since a new blockbuster Transformers movie, Transformers: Dark of the Moon, is set for this summer. He added: "Transformers is a hot boys licence that hasn't entered the construction category," he said. "They've been wanting to enter the category for years."

Silver said the line could make a dent in the construction play set market - although with only 12 sets to start with, it will be tiny compared with Lego's hundreds of items.