Bill's concern over the long-term viability of Pokemon is valid. However, his worry over the Nintendo licensing deal expiring in six years and his contention that Pokemon is a fad seem to be at odds with one another.
He wonders why Nintendo went with 4Kids in the first place, and why it would bother to renew the agreement come 2005. This is easy. Nintendo wanted a proven outsider striking the licensing deals. There is less bias that way. There is also more efficiency. How much do you think it would have cost Nintendo to recognize and nurture the almost 100 stateside relationships that 4Kids has established for the property? You would pay up for infrastructure and you can't lay a price on experience.
Nintendo has tried to push its characters like Super Mario and Donkey Kong beyond the gameplay before. It didn't work. Now, under 4Kids' marketing mastery, you're seeing Super Mario in "Got Milk" ads and Yoshi and Diddy Kong beanies. A lot of the credit for Pokemon's seamless translation of popularity in the Western hemisphere is well earned by 4Kids. Let Nintendo handle the software side of things on its own. It knows that end well. For everything else -- the show, the goods, the momentum -- it will never find a better translator than 4Kids. Nintendo knows it. Now everybody else knows it. Life after Pokemon, whenever that may be, won't be too bad now that 4Kids has become the company to seek out in character rollouts.
Beyond that, is it OK to just take a step back in awe and gaze at the operating prowess of 4Kids? I mean, the margins are so high that Bill has to talk price-to-sales ratios because the price-to-earnings multiple is so alluring when revenues are just 2.5 times higher than the bottom line.
In the end, I think Bill has 4Kids all wrong. He calls it a "one-trick pony" unaware that it owns the stable. He considers the company's business moatless while I think high quality in the service industry is enough to fill the moat with water and vermin. He lumps Pokemon into the "Tickle Me Elmo" camp without considering that while the actual toy came and went a couple of years ago (just as this year's "I Choose You Pikachu") Elmo is still popular enough to merit his own "Elmo in Grouchland" theatrical release today. The characters are what perpetually flap open the wallets.
At this point, I'd like to congratulate Bill and his wife Judy on the birth of their daughter, Hannah Elizabeth. Don't worry, Hannah, daddy will buy a Pikachu.
4Kids, I choose you!
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