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The History of Lego begins in 1932 at a Danish carpentry workshop and continues in the 21st century as a popular line of construction toys and related products and services, including Lego board games, retail stores, Lego video games, Lego films, Legoland theme parks, and even Lego Serious Play consultant services, with a significant impact on various areas of popular culture. Despite its expanson, the compamy remains privately held.
The Lego Group began in the carpentry workshop of Ole Kirk Christiansen, in Billund, Denmark. In 1916, Christiansen purchased a woodworking shop in Billund which had been in business since 1895.:8 The shop mostly helped construct houses and furniture, and had a small staff of apprentices. The workshop burned down in 1924 when a fire ignited some wood shavings.:37 Ole Kirk constructed a larger workshop, and worked towards expanding his business even further. When the Great Depression hit, Ole Kirk had fewer customers and had to focus on smaller projects. He began producing miniature versions of his products as design aids. It was these miniature models of stepladders and ironing boards that inspired him to begin producing toys.:39
In 1932, Ole Kirk's shop started making wooden toys such as piggy banks, pull toys, cars and trucks and houses. The business was not very profitable because of the Great Depression. Farmers in the area sometimes traded food in exchange for his toys; Ole Kirk continued producing practical furniture in addition to toys in order to stay in business. In the mid-1930s, the yo-yo toy fad gave him a brief period of increased activity until it suddenly collapsed. To reduce waste, Ole Kirk used the leftover yo-yo parts as wheels for toy trucks.:15 His son Godtfred began working for him, taking an active role in the company.:15
In 1934, Ole Kirk held a contest among his staff to name the company, offering a bottle of homemade wine as a prize.:17 Christiansen was considering two names himself, "Legio" (with the implication of a "Legion of toys") and "Lego", a self-made contraction from the Danish phrase leg godt, meaning "play well." Later the Lego Group discovered that "Lego" can be loosely interpreted as "I put together" or "I assemble" in Latin. Ole Kirk selected his own name, Lego, and the company began using it on their products.
Following World War II, plastics became available in Denmark, and Lego purchased a plastic injection molding machine in 1947.:25 One of the first modular toys to be produced was a truck that could be taken apart and re-assembled. In 1947, Ole Kirk and Godtfred obtained samples of interlocking plastic bricks produced by the company Kiddicraft. These "Kiddicraft Self-Locking Building Bricks" were designed by Hilary Page. In 1939, Page had applied for a patent on hollow plastic cubes with four studs on top (British Patent Nº.529,580) that allowed their positioning atop one another without lateral movement. In 1944, Page applied an "Improvement to Toy Building Blocks" as an addition to the previous patent, in which he describes a building system based on rectangular hollow blocks with 2X4 studs on top enabling the construction of walls with staggered rows and window openings. The addition was granted in 1947 as British Patent Nº 587,206. In 1949, the Lego Group began producing similar bricks, calling them "Automatic Binding Bricks." Lego bricks, then manufactured from cellulose acetate, were developed in the spirit of traditional wooden blocks that could be stacked upon one another but could be "locked" together. They had several round "studs" on top, and a hollow rectangular bottom. They would stick together, but not so tightly that they could not be pulled apart. In 1953, the bricks were given a new name: Lego Mursten, or "Lego Bricks."
Plastic products were not well received by customers initially, who preferred wooden or metal toys. Many of Lego's shipments were returned, following poor sales. In 1954, Godtfred had become the junior managing director of the Lego Group. Godtfred's conversation with an overseas buyer struck the idea of a toy "system", with many toys in a line of related products. Godtfred evaluated their available products, and saw the plastic bricks as the best candidate for such a "system". In 1955, Lego released the "Town Plan" as such a system, using the building bricks.
The building bricks were moderately received, but had some problems from a technical standpoint: their "locking" ability was limited, and they were not very versatile. In 1958 the bricks were improved with hollow tubes in the underside of the brick. This added support in the base, enabling much better locking ability and improved versatility. The company patented the new design, as well as several similar designs to avoid competition. Ole Kirk Christiansen died that same year, and Godtfred inherited leadership of the company.
Another warehouse fire struck the Lego Group in 1960, consuming most of the company's inventory of wooden toys. Godtfred decided that the plastic line was strong enough to abandon production of wooden toys. As a result, Godtfred's brothers Gerhardt (then head of wooden toys) and Karl Georg left the Lego company and began a separate company "Bilofix". By the end of the year, the Lego Group was employing more than 450 people.
In 1961, Lego wished to expand sales to North America, but did not have the logistical capabilities to do so. Lego made an arrangement allowing Samsonite to begin producing and selling Lego products in the United States and Canada.
1961 and 1962 saw the introduction of the first Lego wheels, an addition that expanded the potential for building cars, trucks, buses and other vehicles from Lego bricks. Also during this time, the Lego Group introduced toys specifically targeted towards the pre-school market.
In 1963, cellulose acetate, the material used to create Lego bricks, was replaced by the more stable acrylonitrile butadiene styrene (ABS plastic), which is still used today. ABS is non-toxic, is less prone to discolouration and warping, and is more resistant to heat, acids, salt, and other chemicals. Samsonite manufacturing in North America did not switch at the same time, and still used some degree of cellulose acetate in its Lego products.
1964 was the first year that instruction manuals were included in Lego sets.
One of the LEGO Group's most successful series, the Lego train system, was released in 1966. The original train sets included a 4.5-volt motor, battery box and rails; two years later, a 12-volt motor was introduced.
On 7 June 1968, the first Legoland Park was opened in Billund. This theme park featured elaborate models of miniature towns built entirely from Lego bricks. The three acre (12,000 m²) park attracted 625,000 visitors in its first year alone. During the next 20 years, the park grew to more than eight times its original size, and eventually averaged close to a million paying visitors per year. More than eighteen million Lego sets were sold in 1968.
In 1969, the Duplo system went on sale. Duplo bricks are much larger than Lego bricks, making them safer for very young children, but the two systems are compatible: Lego bricks can be fitted neatly onto Duplo bricks, making the transition to the Lego system easily made as children outgrow their Duplo bricks. The name Duplo comes from the Latin word duplus, which translates literally as double, meaning that a Duplo brick is exactly twice the dimension of a Lego building brick (2× height by 2× width by 2× depth = 8× the volume of a brick).
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During the last three decades of the 20th century Lego expanded into new areas of toy making and marketing. In 1971, Lego began to target girls by introducing furniture pieces and dollhouses. In 1972, Lego added boat and ship sets, with floating hull pieces.
During this same period, Godtfred Kirk Christiansen's son, Kjeld Kirk Kristiansen, joined the managerial staff, after earning business degrees in Switzerland and Denmark. One of Kjeld's first achievements with the company was the foundation of manufacturing facilities, as well as a research and development department that would be responsible for keeping the company's manufacturing methods up to date. Human figures with posable arms made an appearance in 1974 in "Lego family" sets, which went on to become the biggest sellers at the time; in the same year, an early version of the "minifigure" miniature Lego person was introduced, but it was not posable and had no face printed on its head. A Lego production plant was opened in Enfield, Connecticut in the United States.
In 1975 "Expert Series" sets were introduced, geared towards older, more experienced Lego builders followed by the "Expert Builder" sets in 1977. The technical sets featured moving parts such as gears, differentials, cogs, levers, axles and universal joints, and permitted the construction of realistic models such as automobiles, with functional rack and pinion steering and lifelike engine movements. In 1978 the Lego "minifigure" was added. These small Lego people have posable arms and legs, and a smile. The figure was used in many varieties of Lego sets, allowing construction of towns populated with the smiling minifigure Lego citizens.
In 1979 Lego expanded into space with the creation of Lego Space sets with astronaut minifigures, rockets, lunar rovers and spaceships and the Scala series, featuring jewelry elements marketed towards young girls. Kjeld Kirk Kristiansen became the president of Lego in this year.
Since the 1960s,educators saw Lego bricks' constructive potential as being an invaluable asset in helping children to develop creativity and problem-solving abilities. Teachers had been using Lego bricks in the classroom for a variety of reasons. In 1980, the Lego Group established the Educational Products Department (eventually renamed Lego Dacta, in 1989), to expand the educational possibilities of their toys. A packing and assembly factory opened in Switzerland, followed by another in Jutland, Denmark that manufactured Lego tires.
In 1981, the second generation of Lego trains appeared. As before, these were available in either 4.5 V (battery powered) or 12 V (mains powered), but with a much wider variety of accessories, including working lights, remote-controlled points and signals, and decouplers.
The "Expert Builder" series matured in 1982, becoming the "Technic" series. August 13 of that year marked the Lego Group's 50th anniversary; the book 50 Years of Play was published to commemorate the occasion. In the following year, the Duplo system was expanded to include sets for even younger audiences, particularly infants; new sets included baby rattles and figures with adjustable limbs. The year after, Lego minifigure citizens gained a realm of knights and horses, with the introduction of the first Castle sets. Light & Sound sets made their appearance in 1985; these sets included a battery pack with electrical lights, buzzers, and other accessories to add another dimension of realism to Lego creations. Also that year, the Lego Group's educational division produced the Technic Computer Control, which was an educational system whereby Technic robots, trucks, and other motorized models could be controlled with a computer. Manaus, Brazil gained a Lego factory in this year, as well.
In 1984, the Technic line was expanded with the addition of pneumatic components.
In August 1988, 38 children from 17 different countries took part in the first Lego World Cup building contest, held in Billund. That same year, Lego Canada was established. The Lego line grew again in 1989 with the release of the Lego Pirates series, which featured a variety of pirate ships, desert islands and treasure; the series was also the first to depart from the standard minifigure smiling face to create an array of piratical characters. The Lego Group's Educational Products Department was renamed Lego Dakta in this year; the name is derived from the Greek word "didactic", which roughly means "the study of the learning process." MIT's Dr. Seymour Papert, from the Laboratory of Computer Learning, was named "Lego Professor of Learning Research," after his ongoing work in linking the Logo programming language with Lego products.
Until 1989 Lego minifigures only came in a yellow skin color with standard smiling face, though early prototypes had a variety of skin colors and facial expressions. Lego Pirates in 1989 expanded the array of facial expressions with beards and eye patches, followed by sun glasses, lipstick, eyelashes, and so on. However, many older collectors resented the new look, saying they looked too "cartoon-ish" or "kiddy", and preferred the simplistic nature of the two eyes and smile.
In 1990 a new series designed for advanced builders was released. Three Model Team sets, including a race car and an off-road vehicle, featured a level of detail and realism not previously seen in any Lego series. Where Technic was mechanically accurate, Model Team was visually and stylistically accurate. The Lego Group became one of the top 10 toy companies in this year; it was the only toy company in Europe to be among the top 10. Legoland Billund had more than one million visitors in this year, for the first time in its history. The first-ever "Lego Professor of Business Dynamics," Xavier Gilbert, was appointed to an endowed chair at the International Institute for Management Development in Lausanne, Switzerland. Lego Malaysia was also established in 1990. In 1991, the Lego Group standardized its electrical components and systems; the Trains and Technic motors were made 9V to bring the systems into line with the rest of the Lego range.
In 1992 two Guinness records were set using Lego products: A castle made from 400,000 Lego bricks, and measuring 4.45 meters by 5.22 meters, was built on Swedish television, and a 545 meters long Lego railway line with three locomotives was constructed. Duplo was augmented with the addition of the Toolo line featuring a screwdriver, wrench, nuts and bolts; the Paradisa line, targeted towards girls, brought a variety of new pastel colors into the Lego system and focused around horses and a beach theme. In 1993 a Duplo train and a parrot-shaped "brickvac" that could scoop Lego pieces up off the floor were released.
In the late 1990s, the Lego Group brought out a series of new and specialized ranges aimed at particular demographics. The Slizers/Throwbots line preceded the Bionicle range, and uses Technic pieces and specialist moldings to create a set of action figures for boys, while Belville is a more conventional line aimed at girls and featuring large posable figures like those in the Technic range. A "Lego 4 Juniors" group features 2-inch (51 mm) tall medium-sized figures ("medi-figure") without jointed arms, and longer legs than the classic Lego minifigure. In 2003, the Lego Group introduced a completely new system, Clikits, aimed at girls and consisting of customizable plastic jewelry and accessories. In 2004, Lego added the QUATRO brick, for ages 1–3. Much like Duplo, a Quatro brick is four times the dimension of a regular Lego brick, and is compatible with the Duplo brick. Also that year, they created the second line of Knights Kingdom themed product.
In 1999 the first Lego products featuring licensed characters, i.e. not designed in-house, were Lego Star Wars and Winnie the Pooh Duplo, followed in 2000 by Lego Harry Potter characters to figures from other Steven Spielberg movies. Soren Holm, the head of Lego Concept Lab said toy weapons had always been heavily debated, but that since the Lego Star Wars release Lego has grown "more comfortable with conflict". Mr Laursen, executive North American operations suggested to make “violence not explicit, but humoristic.” After 1999 a number of in-house characters were strongly characterised with media utilisation and non-Lego System merchandising, most notably Bionicle from 2001-2010.
In 2004 Lego posted a loss of £174 million, with executive vice-president of marketing Mads Nipper later describing the company as having been "almost bankrupt" at this point. He analysed in retrospect that "we continued to invest as if the company were growing very strongly. We failed to realise that we were on a slippery path…. Children were getting less and less time to play. Some of the western markets had fewer and fewer children. So play trends changed, and we failed to change. We were not making toys that were sufficiently interesting to children. We failed to innovate enough. And we had nowhere cut deep enough to right-size the company". 
In 2004 Kjeld Kirk Kristiansen resigned as CEO and appointed Jørgen Vig Knudstorp, the first non-family CEO. The four Legoland parks were sold to theme-park operators, and manufacturing that had been outsourced to 80% was returned to Lego's control.
The company focused on its core products and reintroduced Duplo. Since 2004 manufacturing moved to Mexico and distribution from Billund to Central Europe. By 2007 a global workforce of 9,100 in 1998 was reduced to 4,200 due to outsourcing. In the US alone Lego sales increased 32 percent, because of “Star Wars” and “Indiana Jones” themed games, while globally 2008 sales increased 18.7 percent. Mr Laursen, Lego executive of North American operations said in 2009 that licenses played a bigger role in the American market than overseas. About 60 percent of Lego’s American sales were estimated to be linked to licenses, twice that of 2004. Laursen stated in 2009 that Lego was "definitely more commercially oriented”. In 2009, both Lego Games (board games) and Lego Power Miners were introduced; despite the Great Recession profits for 2009 were £99.5 million, with Mads Nipper, Lego executive vice-president of marketing stating to be "delivering twice the return on sales of any competitor".
In 2012 an animated short film titled The LEGO Story made by Danish studio Lani Pixels for the 80th anniversary of Lego, depicted the struggles of Ole Kirk Christiansen and his son Godtfred Kirk Christiansen from 1932-1968, as they worked to make the company successful.
In 2014, Warner Bros and The Lego Group released The Lego Movie, a computer-animated adventure comedy film telling the story of an ordinary Lego minifigure prophesied to save the world. It received one of the highest recorded openings for an original animated movie, and the Los Angeles Times noted "nearly unanimous positive reviews" for the film.