KIDE a good play to capitalize on Pokemon craze Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : KIDE a good play to capitalize on Pokemon craze

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: trung nguyen who wrote (437)	9/23/1999 1:39:00 AM
From: Kevin McKenzie	Read Replies (2) of 1239

The lawsuit is important in one respect in that it gives us a ballpark estimate of KIDE's revenues from Pokemon related products -- $50 million. The suit says Nintendo's U.S. revenue from Pokemon-related products is expected to total $1 billion this year, with $225 million for Wizards of the Coast and $50 million for 4Kids Entertainment. Assumming KIDE's net margin of 26% continues, this implies earnings of about $1.20 for Pokemon products alone. This doesn't include earnings from other licenses. Every additional $1 million in sales adds about 2 cents to KIDE's earnings (again, assuming net margins of 26%). It may not be fair to assume the net margins will remain at 26%. They may increase substantially due to economies of scale. For example the net margins for the three month period ending June 98 were only around 5%, whereas the net margins for the most recently reported quarter were 35%. It's probably safe to assume net margins of at least 30% for this year, which would yield earnings more like $1.35 on $50 million of sales. I personally think the estimate of $50 million is low. I think the Pokemon movie to be released in November will be wildly popular in the U.S. (It was the sixth highest grossing movie in Japan in 98). I also don't think the revenue estimates accurately reflect sales of Topps cards and other non-game card type items, such as candy, stuffed animals, school supplies, art supplies, books, etc. But that's just a wild guess on my part. I also think that KIDE will benefit by being awarded licenses of other "hot properties" in the future, due to their masterful handling and promotion of Pokemon. From what I understand, when KIDE obtained the worldwide licensing rights from Nintendo, many industry experts felt Pokemon was a longshot to make it in the U.S. They felt that the role-playing aspect really didn't appeal to U.S. children the way it did to Japanese children. So Pokemon's success wasn't exactly a foregone conclusion. I bet other companies will recognize this and choose KIDE to promote their properties.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next