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Horizons Broaden In Legoland

Lego has signed an agreement with Microsoft Corp. to create games for the world's biggest software maker, the Danish toy maker said Wednesday.

The financial terms of the agreement were not disclosed.

The closely held Lego, famous for its multicolored interlocking bricks, will create online activities for the children's section of Microsoft's Web sites. The toy maker also will develop Microsoft's new gaming console, the Xbox, which was presented last weekend by Microsoft chairman Bill Gates.

"Together with Lego, Microsoft will deliver an imaginative and powerful way for consumers of all ages to learn and be creative through our leading technology," Rick Belluzzo, Microsoft vice president, said in a news release.

Lego has been moving aggressively toward integrating technology with its classic building blocks. It already has a number of popular CD-ROM games in stores and has been very successful with its Lego Mindstorms, high-tech robots that can be manipulated using microcomputers.

Last year, Lego formed an alliance with filmmaker Steven Spielberg to launch a kit that will let children make movies.

The agreement with Microsoft was timely for Lego, which expects a deficit of up to 500 million kroner ($63 million) in 2000.

"We are now one step closer of goal of becoming the world's strongest brand among families with children before 2005," Lego spokeswoman Eva Lykkegaard said.

"Our expectations for 2000 were far too high. The toy industry worldwide had a bad year and it has been disappointing for everyone," she said.

Headquartered in Billund, western Denmark, the group also operates amusement parks, including one in Carlsbad, California. It also makes clothes, watches and educational products.

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