All That Glitters…

It is common knowledge that LEGO is one of the most recognized brands on the planet: they’re the 71st most valued brand in the world, is progressive when it comes to sustainability, and has some of the most satisfied employees on the planet. Plus it likes to break the fourth wall on occasion. These are all reasons that investors see LEGO in a positive light but with it being privately owned it isn’t possible to buy shares in the company.

However, with well-publicised risks in conventional investment putting people off we’re beginning to look in storage lockers and attics for the next big thing. Console cartridges from the Golden Age of video games, rare Betamax tapes, bean-filled plush toys and vintage action figures from a certain movie franchise have all been under the spotlight in recent decades. And ever since The Telegraph ran a feature on LEGO being a better investment than gold back in 2015 our favourite stud-topped brick has been fair game – a practice known as “brick banking” – much to the consternation of run-of-the-mill LEGO/Star Wars collectors.

And the meme that the best way to guarantee a life of luxury and relaxation is to put your money in the kind of bricks that you wouldn’t build your house out of, unless your name is James May, has rolled around again.

The latest iteration of this myth was brought to us via The Sun newspaper who concentrated on that stalwart of smart financial speculation, the 10179 UCS Millennium Falcon, which the article claims recently “sold for an incredible £8,000 (approximately $10,400) – more than 23 times its original value” despite presenting no evidence.

A quick side step into LEGO forensic journalism reveals that The Sun’s period of research stretches back three months – coincidentally the same amount of time that eBay keeps its auction result publically archived for – yet there hasn’t been a sale anywhere remotely close to the claim.

Further, The Sun goes on to paraphrase “A spokesman from eBay” who they claim “revealed that the highest price a 5,197-piece Ultimate Collector’s Millennium Falcon set sold for in the last three months was £8,000” but don’t actually name said spokesperson.

So unless this sale miraculously slipped by every Star Wars and LEGO news blog on the Internet this claim is highly dubious. The Holo-Brick Archives thought that it would learn a bit about economics and investing to put the claim to the test.

Looking at the secondary market price of every set is implausible so The Holo-Brick Archives decided to deep dive into sales of the evergreen 10179 UCS Millennium Falcon to test the theory that it is a more valid investment than gold.

The first UCS Millennium Falcon was announced in February 2007 and those who pre-ordered it before March 31st had a numbered certificate of authenticity sealed within the box. Initially the allocated run was for 5,000, such was the risk LEGO attributed to dedicating a large proportion of its production facilities to a set with 5,195 pieces.

A certain amount of confusion exists around this initial production run, with many people assuming that the COA was limited to it, but photographic evidence shows verified certificates up in the 14,000s, with anecdotal evidence suggesting that the numbering nearly reached 20,000. Nor is it fully understood how many First Edition-marked boxes were printed but the consensus is that the badge is exclusive to the first run of 5,000 sets.

Imagine the excitement when LEGO released the first details about this mega model.

Build the ultimate Millennium FalconTM!

This is it – the biggest, most spectacular LEGO® model ever! Straight out of the classic Star Wars movies comes the Ultimate Collector’s Millennium Falcon, Han Solo’s famous smuggling starship. Every detail of the modified Corellian Engineering Corporation YT-1300 freighter is here, all constructed to scale with LEGO minifigures. At almost 3 feet (90cm) long, it’s the ultimate centerpiece to any LEGO collection!

    • With over 5,000 pieces, this is the biggest LEGO set ever made!
    • Model is built completely to minifigure scale – minifigures can sit inside and man the controls!
    • Landing gear provides a stable base for model to stand on!
    • Ship is over 33″ long, 22″ wide and 8″ tall! (84cm long x 56cm wide x 21cm tall
    • Radar dish rotates and elevates and boarding ramp extends!
    • Top and bottom quad-laser turrets rotate for realistic play!
    • Cockpit top can be removed to access minifigures!
    • Includes 5 minifigures: Han Solo, Chewbacca, Obi-Wan Kenobi, Luke Skywalker and Princess Leia Organa!
  • This special set also includes a display card with detailed ship specifications

As much as this turned the world upside-down, LEGO was understandably nervous that sales would clog their warehouses with piles of unsold boxes so the initial run had a 1st edition badge on its packaging to coax would-be owners in to shelling out US$500 (CA$680, GBP£350, EU€550 or AU$980). As history shows the first batch, which started shipping at the end of May, sold well and the set went into further production runs before retiring in 2009 (though it didn’t fully sell out until June 2010).

What made it so special?

When it first came out it was the biggest, most expensive set LEGO had ever made, was the first LEGO set to come with a certificate of authenticity and was an icon of a cultural phenomenon that looked more like a sculpture than a toy when displayed – and these four claims caught the eye of the public, whether they were interested in Star Wars or not.

And because this set was so large online orders and consignments to LEGO stores were shipped in a dedicated shipper box plus the initial offerings had a typo on the data plaque that armed the Millennium Falcon with 12 quad cannons. This was fixed as a running change and owners who had the incorrect one were able to contact LEGO Services and get a replacement sticker sheet for free.

All these factors combined to make an attractive and highly sought after set whose popularity has never waned.

Cards on the table: I sold my 1st edition 10179 UCS Millennium at the start of 2016 for a goodly sum that equated to a 666% increase from the original RRP so I know it is possible to cash in on LEGO. I didn’t, incidentally, set out to do this and the fall out of this sale has been documented in a recent article I wrote.

But there were a number important circumstances to take into that made mine more appealing: it included the shipper box, was unopened with the certificate of authenticity intact, had the misprinted and corrected data plaque, was used in the photography of the first edition of the LEGO Star Wars Visual Dictionary, was located in Australia where examples of these models are less common – and most importantly 75192 Millennium Falcon wasn’t even on the rumour lists, much less announced.

Since the release of the rebooted, and some might say superior, 75192 Millennium Falcon the price of the original has dropped. At the time LEGO investors were expecting an absolute crash in the value of 10179 but the immediate effect was less dramatic, with a steep $1000 devaluation over the first few weeks that LEGO was taking orders on 10179’s replacement.

Says Ed Maciorowski, founder of LEGO price tracker, “Price rises can be disrupted if LEGO restarts production of sets it had previously retired – but usually the effect is temporary as investors snap up the new stock”.

However with the three months delay in shipping, problems with ordering and miscommunications about its availability LEGO buyers got frustrated and turned back to the original 2007 set which had a much more steady supply. This caused the set’s value to go back up and by the end of 2017 it had recovered much of what it had lost.

But in that time resellers were worried that the money they’d sunk it their 10179 UCS Millennium Falcon’s would be damaged beyond repair. With a number of UCS sets – such as X-wing, Y-wing, Death Star, Snowspeeder and Millennium Falcon – already re-hashed and more coming investors are beginning to think that all that’s LEGO is not gold after all.

Re-releases – whether partly revised or top-down redesigned – also mean that resellers aren’t perpetually hoarding sets, and forces them to watch the market and time their sales accordingly. As Brick Fanatics put it:

“If the LEGO Group are going to continually re-release sets now, that would be great for LEGO fans – it would mean much less need to resort to the aftermarket, so prices would be driven down. “

And while resellers grind their teeth every time a LEGO set is rehashed, those buyers who want to enjoy LEGO rejoice because it gives the average LEGO buyer the option of owning the latest version for RRP or the previous rendition who becomes more accessible affordable.

They are also good for the brand reputation of LEGO, whose image is damaged every time a newspaper prints a gold vs LEGO story. On paper you might assume that any report that says their construction toys go up in value is a positive – and it is for anyone wanting to buy sets in order to lock their spend money away for a rainy day – but in reality the effect is a negative as it discourages buyers away from building and playing with the toy, and LEGO doesn’t want that.

If you are adamant about putting your chips down on LEGO there are a couple of go-to resources: the previously mentioned Brick Picker is, according to their own mission statement, “the definitive online LEGO community that offers information, deals and help to all levels of LEGO collectors and investors and uses eBay and Amazon’s Marketplace platform; one of the biggest LEGO information sites – Brickset has prices based on Bricklink, the mightiest of online, secondary LEGO market sites.

Before you start your brick-based portfolio you factor in the original US$500 spend, now worth US$608 in adjusted value, would have earned an additional US$169 in compound interest. So – global financial crisis aside – the 55% increase the spend would have earned just by mundane banking practices alone seems to be pretty lucrative.

Brick Picker notably aggregates the rising value of LEGO sets by using compound annual growth rate (CAGR), which is the mean annual growth rate of an investment over a specified period of time longer than one year.

The mean average of the most current valuation is 18%, which tells suggests that the set increases nearly 20% a year. This isn’t quite true because it is an average over the full lifespan of sales on the set, which is 11 years. So it’s a representational figure; essentially a number that describes the rate at which an investment would have grown if it had grown at a steady rate, which virtually never happens in reality.

Currently, the CAGR of gold is 5%, which is remarkably lower than the CAGR of 10179’s. But this isn’t a straight forward answer, and to compare apples with apples we have to put them on the same playing field.

Taking the regional prices from Brick Picker we get a global average of US$3524, from a starting point of US$500, which is an increase of 605%. Whereas gold in 2007 was around US$22 per gram and is now trading at close to US$40 per gram, a clear increase of 81%. Far less than the increase demonstrated by the LEGO set.

Put another way the original UCS Millennium Falcon, which weighs 10.2kg, would have cost US$224,620 in 2007 if it had been traded weight-for-weight with gold. Nowadays that same set would need US$408,400!

To help understand why the CAGR is just a representation look at the difference in the set’s value at the start of the year (around US$2190) and the end of the year (an approximate US$2170); a 0.9% drop, which given a reasonable margin of error is almost irrelevant. Remarkably gold over the same period* dropped in value by 1.2%.

As a broad trend the sales graph portrays a much more static price in new 10179 sets – the only exception is a peak in September due to the official release announcement and a prominent dip in December, which coincides with the start of online orders shipping and pressure from Christmas expenditure – and doesn’t reflect the long-term CAGR of almost 20%. The lesson here is that if you’re in the LEGO investment game then expect a long wait before you get a decent return.

So if you are in the market for the original UCS Millennium Falcon then take your time – and who is in a rush to spend thousands of dollars anyway? There are plenty of opportunities to pick one up for far less than the popular press would have you think, so where to start?

Conveniently Brick Picker break down their data into a number of regional markets – and the immediate take away is that the USA is the cheapest place to buy a 2007 UCS Millennium Falcon.

Of course, you can check out, where there are 26 sets listed amongst auctions for reproduction stickers, instructions and a whole slew of 75192 Millennium Falcon sets. Being an auction price there’s no reason to quote the lowest and highest price, but suffice to say there is a wider range of quality on EBay than any other source so you can flex your expectations to your budget.

Then there is a site that most LEGO fans will know and likely few Star Wars fans have ever heard of –, an online commerce site that facilitates the buying and selling parts, sets, and other LEGO related items. Think of what Amazon would be like if it was solely LEGO. Currently on Bricklink there are 94 listings for Millennium Falcon – UCS (Item No: 10179-1), ranging from around US$680 to a staggering US$11,340.

So important is Bricklink within the LEGO community that the term “bricklinking it” has been coined to describe a LEGO set that has been built from seperate purchases from the millions of LEGO bricks that the +10,000 sellers have available through the website. Getting an UCS Millennium Falcon through this method will cost you close to US$1800 – not the cheapest method, but one that is surprisingly rewarding.

As for the other five LEGO sets – three of which are from Star Wars line – on the The Sun’s list? While their rise in value isn’t as meteoric, they fit the bill the same as any other retired LEGO set and this isn’t likely to change between now and the 20th anniversary of the LEGO Star Wars line when – if rumours are to be believed – a commemorative Ultimate Collector’s Series set will be launched.

Hopefully that will be enough to close the case and fans can collect to collect instead of collect to capitalise.

…and all that’s gold does not glitter.

Entertainment Earth

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