4kids: Playing the Cards right? Or Betting With a Pair of Threes?

TakinawaTonfa

It would seem that 4kids is really getting a move on completely transforming the company image. The following article is from the USA Today website (something like this is also on ANN, but their links don't seem to work at the moment.)

@David:

4Kids, marketer of Pokemon and Yu-Gi-Oh! gets into card business

NEW YORK — After years of helping other companies to get rich off trading card games, including Pokémon and Yu-Gi-Oh!, TV and marketing company 4Kids Entertainment will unveil on Monday plans to change from a licensing agent to an independent force in the growing $5 billion-a-year industry.

Publicly traded 4Kids (KDE) bought rights to a Danish game, Chaotic, and is starting a trading card division that will handle all facets of the business.

4Kids also programs Fox Broadcasting's Saturday morning kids' shows and will introduce Chaotic characters in a weekly animated series starting Jan. 6. Trading cards and an online game will be available in the spring, followed by toys, games for handheld players and merchandise.

"Whether (kids) will buy these things in droves, who the heck knows?" 4Kids CEO Alfred Kahn says.

After seeing fans spend $15 billion on Pokémon goods since 1998, and $6 billion on Yu-Gi-Oh! since 2000, he says he doesn't need to capture lightning for his investment to pay off. "All I need is a little thunderstorm."

He has a lot riding on the new game and business as fan interest has waned in Yu-Gi-Oh! and Teenage Mutant Ninja Turtles, licenses that accounted for 56% of 4Kids' revenue in the first nine months of this year. The company had a net profit of $1.3 million for those months, down 71% vs. the same period in 2005, on revenue of $53.5 million, down 6.3%.

Chaotic also faces lots of rivals, including a new card series based on the series Ben 10, which airs on Cartoon Network.

"The odds are against them," says Jefferies & Co. analyst Robert Routh. "Very few properties like Chaotic take off. Even Yu-Gi-Oh!, which did incredibly well, died out pretty fast. And this is no Pokémon."

Yet retailers likely will support 4Kids.

"We've looked at everything they've done, and we're going to recommend to all our customers that they carry the product," says Steve Jones of Excell Marketing, which distributes cards to outlets including Target and Walgreens.

The trading cards are key to the franchise, which has a storyline that will roll out over seven years. The TV series will give players information that will help them compete in games.

The twist with Chaotic, though, is that each card will carry a code number that enables gamers to play others online.

"We're going to bring entertainment back to where the kids are," says Bryan Gannon, who leads the Chaotic trading card and online efforts. A Wi-Fi enabled scanner, which can capture card images, "will be the key toy for the brand."

The company will have a website where people can compete, get information, chat with other enthusiasts and buy Chaotic-related merchandise.

"We've seen what the future is," Kahn says. "Whether we can deliver it — that's what we're going to find out."

Casusby

"Whether (kids) will buy these things in droves, who the heck knows?" 4Kids CEO Alfred Kahn says.

I really really love this quote. He's stating flat out that it's a gamble, which is kind of interesting.

Of course we all know that they're driving away from licenses, and clearly they have to keep doing business, pulling the kind of numbers they use to, they can't just go quietly into the night. It seems like a very clear cut "get moderately rich for a while" plan, which probably would have worked better a 5 or 6 years ago when Pokemon cards were still the rage. But you know, it seems like a number band-aid to me. Something to prove to share-holders that "Hey, we're not dead yet, don't sell out now! We're doing something!".

But really, how much longer do we have to pay attention to this company?
And how many times do I have to feel like I'm a broken record.

The_green_samurai_ranger

@Casusby:

He's stating flat out that it's a gamble, which is kind of interesting.

Business is always a gamble, the thing that 4KIDS is correctly doing is that they are teasing the market to make consumers want more.

If enough material is pushed behide the show, them the gamble will pay off because children will believe that the cards are a must have item.

Casusby

@The_green_samurai_ranger:

Business is always a gamble, the thing that 4KIDS is correctly doing is that they are teasing the market to make consumers want more.

Uh-duh, of course it's always a gamble, but you don't tell people it's a gamble. It affects stock, it affects stock-holders, it affects profit. You want to people to believe that the money they've invested in you is in your total and complete control.

You can't tease the kiddies into wanting more by telling people it's a gamble in an online USA Today article. I don't know many CCG players under the age of 13 who will read such articles on a business.

If enough material is pushed behide the show, them the gamble will pay off because children will believe that the cards are a must have item.

Create supply and you create demand? I don't know man. I think you need to have demand first before supply. They'd need extensive advertisement and a primo timeslot and network to run whatever show is associated with this product. Which I'm up in the air about, they might not be able to pull enough of it.

taboo

"We've seen what the future is," Kahn says. "Whether we can deliver it — that's what we're going to find out."

The future? Or simply rehashing the past?

The_green_samurai_ranger

@Casusby:

Uh-duh, of course it's always a gamble, but you don't tell people it's a gamble. It affects stock, it affects stock-holders, it affects profit. You want to people to believe that the money they've invested in you is in your total and complete control.

Yes that was a dumb mistake on their part, but at least 4KIDS are being honest. Still if I have stock in the company, I would be pretty upset over the idea that my money is nothing more then chips in a poker game that I'm not actually playing in.

@Casusby:

You can't tease the kiddies into wanting more by telling people it's a gamble in an online USA Today article. I don't know many CCG players under the age of 13 who will read such articles on a business.

No one under the age of eighteen will actually read that article. That is why 4KIDS is pushing the show and cards during their broadcast timeslots with codes to use on their main site and etc. That will get children interested in the show and game.

@Casusby:

Create supply and you create demand? I don't know man. I think you need to have demand first before supply. They'd need extensive advertisement and a primo timeslot and network to run whatever show is associated with this product. Which I'm up in the air about, they might not be able to pull enough of it.

Look at Nintendo with the new console, they created a demand for the system and sadly, here in American, they are not fully living up to the original release supply that they said that they would have. That makes more of a demand for the console. A small but not noticable supply and demand chain is now formed. If 4KIDS could do the same thing by over hyping the show and game, then not having enough supplies to make everyone happy, an increase in demand would happen and then an price increase on say every pack of cards would occur to make 4KIDS even more profit.

Off topic, what is going on with your signature and avatar?

Malintex_Terek

I'd comment but I can't read an article with a horizontal slant! Sounds interesting, though.

Casusby

@The_green_samurai_ranger:

No one under the age of eighteen will actually read that article. That is why 4KIDS is pushing the show and cards during their broadcast timeslots with codes to use on their main site and etc. That will get children interested in the show and game.

Ok, either you were using teasing in a weird context or you're going off into a new tangent. Yes it's true they're trying to pull in more buyers by offering an extra use for the cards that they purchase, but children are not inticied by multi-function products unless it blinks, flashes and makes 7 different types of noises. The idea of codes and web play is hardly something the average young 6-11 would be interested in, maybe 10 - 11's, but that's really playing to a fraction of their demographic.

@The_green_samurai_ranger:

Look at Nintendo with the new console, they created a demand for the system and sadly, here in American, they are not fully living up to the original release supply that they said that they would have. That makes more of a demand for the console. A small but not noticable supply and demand chain is now formed. If 4KIDS could do the same thing by over hyping the show and game, then not having enough supplies to make everyone happy, an increase in demand would happen and then an price increase on say every pack of cards would occur to make 4KIDS even more profit.

There is no way you can compare the demand Nintendo generates and the demand that 4kids can generate. It's David vs Goliath here. If you took a survey of youth, and ask them if they knew what Nintendo is, and what 4kids is, what do you think the results would be?

Unless you've heard something about them taking a new direction in advertising and selling their brands, their currently declining brands would serve to show that they can not maintain a steady interest in whatever they acquire.

@The_green_samurai_ranger:

Off topic, what is going on with your signature and avatar?

What do you mean? Like where are they from? They are from Dan Kim's delightfully disturbing comic strip "Momoka Corner" from his Clone Manga site. His drawing skill is amazing, but his writing is twisted. Not for children.