Marketing monster

Marketers took a chance that American kids would love Pokemon as much as Japanese kids do. The risk paid off. Pokemon, short for ""pocket monster,'' is setting a new standard for the design, planning and marketing of a toy line. Next stop: Europe.

By KYLE PARKS

© St. Petersburg Times, published October 24, 1999

As frazzled parents scrambled to get in line, the Toys "R" Us store in St. Petersburg sold $2,900 worth of Pokemon trading cards in an hour on a recent Saturday.

At one cash register, a boy was crying because the store didn't have the card packs he wanted.

In another line, a parent begged store manager Melinda Van Cleave to give her a break: She had waited 45 minutes, only to find she was at a register that wasn't selling the cards.

"I've seen a lot of toy crazes," Van Cleave said later, "but never one as intense as this."

Loren Loaiza, 9, looks over Pokemon cards at Demolition Comics in Tampa. [Times photo: Jim Stem]

All over the Tampa Bay area, kids are trading Pokemon cards at Little League games, Scout meetings, even in elementary school bathrooms. At the Demolition Comics store in Tampa, the owner gets so many calls he's considering an automated phone greeting that starts, "Press 1 for Pokemon."

Parents have endured their share of toy crazes over the years -- remember Furby and Tickle-Me-Elmo? But toy and collectible store owners say Pokemon is different, and that it will have staying power.

It's no coincidence that Pokemon is everything from a TV show to a card game. Pokemon's Japanese marketers planned their U.S. assault with the precision of a military campaign, and they have plenty of weapons: The nation's top-rated TV cartoon series for kids. A Nintendo Game Boy electronic game. Internet sites. Videos. A soundtrack CD. They've even sent 10 yellow Volkswagen Beetles around the country, dressed up like the star character, Pikachu.

It's all hitting kids at once -- and that's the idea. Pokemon is setting a new standard for the design, planning and marketing of a toy line.

Pokemon (pronounced poh-kay-mahn) is a shortened version of the Japanese shorthand for "pocket monster." It's a game in which human "trainers" collect cute, animated characters with names such as Charizard and Alakazam, and send them into battles with characters held by other trainers.

Scores of Pokemon products are coming to a store near you. Since Pokemon arrived from Japan a year ago, more than 150 companies have signed licensing agreements to sell everything from Halloween costumes to plush toys to bathrobes.

Chris Thomas, left, and Anthony Dang, center listen to a card-trade proposal from another collector at Toys "R" Us in St. Petersburg. [Times photo: Lisa DeJong]

Unlike other must-haves such as Beanie Babies, which end up on a pillow or shelf, the electronic and trading-card versions of Pokemon are games children can play with friends. And with cards placed randomly into packs -- just like old-fashioned bubble gum packs that carry baseball trading cards -- kids must keep buying to get the characters they want.

For kids ages 4 to 13, the hottest Pokemon products are the trading cards: There's one for each of Pokemon's 151 characters, but good luck finding them. As soon as stores get a shipment, they sell out, and the rarest cards fetch as much as $50 on the secondary market.

As with any toy success, it was no sure thing.

The marketers took a chance that American kids would love Pokemon as much as Japanese kids do, even though some of the character names and the elaborate mythology that goes with them might seem more at home in Tokyo than here. The risk paid off. Now, toy experts expect Pokemon to be hot for several years, not just through the upcoming holiday season.

"It has all the elements for kids," said William Insignares, the harried owner of Demolition Comics. "Parents don't understand it. Kids can play the game. The cards have a perceived value. And the media is showcasing it."

So far, Pokemon products have brought in more than $5-billion in revenue. To keep it going, a movie comes out in two weeks, and marketers have set their sights on Europe, where the TV show already is a hit. As a London newspaper said: "Parents, be afraid. Be very afraid."

Coming to America

"There were all kinds of naysayers when the talks started about bringing Pokemon to America," said Carlin West, senior vice president of marketing for 4Kids Entertainment Inc. of New York. " "It won't translate,' they said. "It's not exciting enough.'

But Alfred Kahn, a veteran toy executive who helped popularize Cabbage Patch dolls, was convinced the concept would work in the United States. Kahn and Thomas Kenney run 4Kids, a small company with 50 employees that also markets toy products for pro wrestling and monster trucks.

Kahn and Kenney had seen Pokemon's popularity during visits to Japan, and they patiently worked to persuade Nintendo execs to introduce it in America with 4Kids' help.

Starting in 1996, Nintendo had built up the Pokemon franchise gradually in Japan. The Game Boy video game came first, followed by toys, trading cards, books and finally the TV show. Pokemon got its first worldwide publicity in 1997 when hundreds of Japanese youngsters needed medical treatment for seizures after watching an episode that featured a scene with an explosion, followed by five seconds of a flashing red light.

In America, the marketers took the opposite approach, planning an all-out blitz that started with putting the TV show into syndication last fall. Many stations were hesitant, so they were given the show for free in exchange for a cut of ad sales.

"Our biggest obstacle was introducing it, getting people to understand it," said Beth Llewelyn, a Nintendo spokeswoman. "After all, it has a wacky name."

At the same time, Nintendo sent 1.2-million free videocassettes to its Game Boy customers, introducing them to Pokemon. And in January, the companies launched the Game Boy game and the trading cards.

Since then, Nintendo has sold more than 4.5-million of the electronic games, while a small Renton, Wash., company called Wizards of the Coast Inc. has sold more than 500-million of the cards. Last month, Wizards was sold to toy giant Hasbro Inc. for $325-million.

Wizards officials say the cards are so hard to find in stores because they can't make them fast enough, even though they have five factories going around the clock. One problem is the company can't get paper fast enough to feed the demand.

All the companies connected with Pokemon are expected to clean up this holiday season, but Hasbro is expected to be the biggest winner. In addition to the cards, it has licensing agreements for products such as plush toys, talking electronic figures and cameras. Pokemon is predicted to be the season's top-selling toy line.

Nintendo and 4Kids Entertainment get royalties from the licensing agreements, and stock analysts are bullish on both companies. In fact, 4Kids' stock price has gone from about $2 to more than $63 in a year. The stock, which trades on Nasdaq, closed Friday at (KIDE)$xx.xx.

"Nothing is forever in the toy business, but the people behind Pokemon have been careful to plan it as at least a three-year property," said John Taylor, a toy analyst with Arcadia Investment. "They didn't plan everything," he added. "This has taken on a life of its own."

A strategy for success

At most area schools, the cards have been banned because kids wouldn't stop playing with them in class or fighting over them at recess. Still, some kids have been surreptitiously making trades in hallways and cafeterias

The frenzy carries over to the home front. In Tarpon Springs, enterprising 8-year-olds Tommy Trask and Lincoln Dunham have been running a neighborhood Pokemon card stand. It beats lemonade: On a recent weekend, Tommy brought in $48.

"I like how the cards look," Tommy said, "and I like to trade them to get ones I don't already have."

Pokemon seems most popular with boys, but many girls are taken with it, too. Why the intense interest across such a wide range of ages? Toy experts point to several reasons why the marketing strategy has worked so well:

n The TV show explains the game and helps make it exciting, and there's plenty to hold kids' attention. Each Pokemon character has unique powers used in the battles, and many of them "evolve" into other characters. Kids even mimic the show's trainers when they play the game: "Pikachu, I choose you!" they'll say.

n Kids have to keep buying more card packs to get the characters they want, and some characters are harder to get than others. Each card has a symbol, such as a diamond or circle, denoting how rare it is, and the chance of getting valuable holographic cards is estimated at 1 in 33. Collecting also ties in to the show, where trainers add to their stable of characters by winning battles. The motto: "Gotta catch 'em all."

n Instead of trying to create a worldwide frenzy all at once, the marketers are taking one continent at a time, giving them time to customize the concept. For instance, when producers modified the TV show for the United States, they reworked several scenes that showed Japanese customs.

"The marketing campaign has been successful because all the different elements are working together," said Cliff Annicelli, an editor at Playthings magazine, a toy industry trade publication. "Other products would get hot and then the company would try to get related products out there. This was different, very well orchestrated."

Still, there are naysayers. Two law firms have filed a lawsuit alleging that Pokemon card trading is gambling. Representing five New York and California kids ages 6 to 9, the firms say that because the cards are randomly put into packs, kids are gambling that they'll get a valuable card when they buy a pack.

Officials at Nintendo and Wizards of the Coast say there are no grounds for the suit, that baseball cards have been sold this way for years. Still, some parents and educators worry about kids becoming obsessed with Pokemon.

"It's all in how you handle it, I think," said Laura Trask, Tommy's mother. "In our house, the cards are a really good reward for behavior. There's no problem getting him to do chores."

The key is to keep Pokemon from interfering with important things like schoolwork, said Jonathan Greenstein, a clinical psychologist with Tampa Children's Hospital at St. Joseph's. "Parents have to keep an eye on it," he said.

Greenstein knows: One of the kids he counsels was thrown out of a camp last summer after stealing cards from younger child and running his own black market.

Now, the challenge for Pokemon's marketers is to make it a phenomenon in Europe, while thinking of ways to keep pumping up U.S. sales.

Electronic games, toys and trading cards are starting to arrive in European stores. In America, Pokemon the Movie: Mewtwo Strikes Back hits theaters Nov. 12. While there, patrons will get an exclusive Pokemon trading card, and the soundtrack will include songs from teen music stars Britney Spears, Christina Aguilera and 'N Sync. "An important factor in keeping it fresh is by introducing new characters," Nintendo's Llewelyn said. "The movie will introduce some new characters, and there is talk of more games."

Under discussion: a new electronic game that would have as many as 100 new characters.

Even those without the slightest interest in Pokemon can find themselves amid the phenomenon.

At the Toys "R" Us in St. Petersburg, one exasperated woman had the misfortune to be looking for another type of toy in the middle of the Pokemon card-buying frenzy. Clueless about Pokemon, she asked store manager Van Cleave what the fuss was about.

"What are you giving away?" she asked.

-- Times researcher John Martin contributed to this report.

© St. Petersburg Times. All rights reserved.