Lego partners China's Tencent to develop online games

Danish toymaker Lego is teaming up with Chinese internet giant Tencent Holdings to develop new video games and potentially a new social network aimed at children, the two companies announced Monday.

"What we are looking for now with Tencent is just to find more creative ways… (of) reaching children, and creating bespoke content with Tencent, in this case, video games,” Jacob Kragh, head of Lego in China, told Reuters on Monday at joint event with Tencent in Beijing.

Lego has struggled in recent times and was last year forced to cut around 1,400 jobs. China is a bright spot for Lego. Lego will develop a "video zone" for children on Tencent's video streaming platform as well as Lego-branded games.

Lego's partnership also includes Lego Boost, a building and coding set that brings movement to its brick creations. The two companies also said they will explore co-developing Lego Life, a "safe social network for children" in China.

Last year, Barbie-maker Mattel struck deals with Chinese e-commerce giant Alibaba Group and online content developer BabyTree to sell interactive learning products based on its Fisher-Price toys. In November 2016, Lego opened a factory in Jiaxing, China, which it expects to produce 70-80 percent of all Lego products sold in Asia.