NEW YORK (Reuters) - After cranking out U.S. trading card hits such as Pokemon and Yu-Gi-Oh, both of which have cooled in popularity among grade-schoolers in recent years, 4Kids Entertainment Inc.’s chief executive Al Kahn has been looking for the next big thing.
And with Chaotic -- a game that combines trading cards, a Saturday morning cartoon and the Internet -- Kahn not only thinks he’s found it, he also says he’s discovered a new form of entertainment with the game, which was created by Danish game maker Dracco Co. in 2000.
“No one’s ever done it. It’s a brand new concept and we believe we’re on the cusp of something pretty exciting,” Kahn said in an interview. “The Web and television are colliding faster than we all imagined, so online gaming is becoming a very important position.”
The speed by which Chaotic took off in Denmark led Kahn to believe its success could be duplicated in the United States, so in 2005, 4Kids Entertainment bought its rights.
Analysts say 4Kids, whose stock is down 9 percent so far this year through Monday’s close, is in need of a hit.
The company has been grappling with falling revenues amid tumbling demand for Yu-Gi-Oh, as well as the Teenage Mutant Ninja Turtles franchise.
Susquehanna Financial analyst Michael A. Kelman said in a March research note that 4Kids Entertainment will spend between $10 million and $15 million on the launch of the trading cards and Web site, and said the jury is still out on whether Chaotic can catch fire in the United States.
“While the company expects to generate a sufficient return on this investment, it is still too early to determine the success of this venture,” Kelman wrote.
But Kahn, who has been with the company since 1988, hopes he has a new hit on his hands.
The cartoon, which airs Saturday mornings on Fox, tells the tale of two teenage boys who, while playing Chaotic, discover a portal to a secret world that’s home to hundreds of different creatures.
The boys soon discover the alphanumeric codes on their cards are like DNA for the different creatures.
When pressed into battle, players transform into the creature on the card, with the winner claiming the loser’s creature code.
Chaotic can be played in person, or online by uploading the cards onto the Web using a unique 15-digit alphanumeric code found on each card. The cartoon is designed around the game and is a tool to give players hints.
Independent toy industry consultant Christopher Byrne lauded the combination of the Internet, television and in- person play as much-needed innovations in what’s become a saturated gaming category.
“It’s got all of the elements in place to catch on. And if it doesn’t catch on, it’s not because they haven’t thought it through and they’re not delivering a great product,” Byrne said.
“You hit boys especially, in the three places where they live, so I think the opportunity for it is very strong.”
Chaotic will make its debut later this summer in comic book stores and hobby shops as part of Kahn’s plan to slowly build momentum for the game, a similar strategy to the one he used for Pokemon and Yu-Gi-Oh.
“We don’t have to prove in one second that the thing is good or bad because we know that it takes time for these things to be received,” Kahn said. “We’re in a marathon, not a sprint.”
And despite a crowded market, Byrne said the stage is ripe for Chaotic to become the next trading card craze.
“They’ve got a lot of the components to give it their best shot, so it’s now really up to the market to decide,” Byrne added.
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