LAFFERS DANCE - Kidscreen

4Kids tries its hand at
manufacturing to better
manage the profits and
performance of its
TCG-led IP Chaotic
4KIDS TRADES UP IN THE TCG MARKET
b y j o c e l y n c h r i s t i e
With TCG-cum-online game Chaotic due out in Q2,
New York’s 4Kids Entertainment is gearing up to revolutionize
the trading card category on a number of levels
this year, starting with its business model. The company, which
has traditionally conducted its card business via licensee Upper
Deck Entertainment, is launching two new subsidiaries to cut out
the middleman and retain more of the profits from the property.
This marks the first time 4Kids has tried its hand at manufacturing,
and it may be indicative of the way the company plans
to operate in the future. “The role of the licensor is changing,”
explains 4Kids chairman and CEO Al Kahn. “The licensees
don’t drive the train anymore; they are at the behest of the
retailers, to a large extent. So the licensor has to do a lot more
in terms of promotion, advertising and retail strategies. And
the traditional licensing model of just getting royalties, in some
cases, negatively impacts a property owner’s ability to do what
they need to do.”
Upper Deck currently holds trading card licenses to Yu-
Gi-Oh! and Winx Club (which 4Kids manages in the U.S. for
Italian owner Rainbow), and Kahn sees no need to change this
relationship. But once the digital trading card platform has
been perfected with Chaotic, the plan is to tap into it perennially.
“Basically, we’re going to license the crap out of it,” says
Kahn. While it’s very possible the new companies will open
up to third-party licenses down the road, for the time being,
they’ll focus on a handful of new 4Kids properties that have
been developed specifically to play into the new technology
and patents.
Former Upper Deck VP of business development Bryan
Gannon will head up both TC Digital Games and TC Websites
as president and CEO. While TC Websites beta-tests the massive
portal that supports Chaotic’s online game component, TC
Digital Games is busy working with distributors, who control a
lot of the retail space devoted to trading cards at mass.
According to NPD toy industry analyst Anita Frazier, the
trading card market does about 10% of its total business in
the games category, which racked up sales of US$2.1 billion
in 2005. Carlsbad, California-based Upper Deck (with topselling
property Yu-Gi-Oh! in its stable) and Wizards of the
Check out how studio consumer products groups are making their film-based
lines cut through in a toy market that’s saturated with CGI movie licenses (page 43). “4Kids TCG” continued on page 19
JANUARY 2007
15
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