Friday July 21, 7:34 pm Eastern Time
As Pokemon movie opens, toy craze shows signs of fading in U.S
By Deepa Babington
NEW YORK, July 21 (Reuters) - Pikachu and his friends may fill some theatres this weekend as ``Pokemon The Movie 2000'' opens in U.S. theatres, but their ability to attract kids to the nation's toy stores appears to be waning.
After fascinating millions of children and many of their parents for a year or more, the cuddly yellow Pikachu and his Pokemon pals may have lost some of their allure, as retailers report that some of their Pokemon-related merchandise is no longer flying out of their stores.
Last year Pokemon was virtually unchallenged in its position at the top of every child's wish list, and trading cards featuring the colourful cartoon creatures became a near-obsession in playgrounds.
This year the characters -- whose images have appeared on everything from afghans and balloons, to lunch boxes and baseball caps -- have lost momentum and sales in the United States, though they remain hot commodities in other countries.
``It sounds like Pokemon has had its moment of glory and now it's slowing ... and kids are moving on,'' said Hayley Kissel, an analyst at Merrill Lynch Global Securities. ``When you have a hot product, you never know when it'll flame out. Things flame out faster today because kids have so many other things to turn to.''
On Thursday, Hasbro Inc., the toymaker licensed to make Pokemon products (NYSE:HAS - news), said the U.S. market for Pokemon products was weakening, a trend it said
could hurt its performance in the second half of the year.
Pokemon, short for Pocket Monsters, is the name given to a colourful collection of 150 creatures that originated six years ago as a video game in Japan to run on Nintendo's Game Boy system.
``Last year at this time, Pokemon stood alone at the top of the pack,'' said David Leibowitz, managing director at Burnham Securities. ``That is not the case now.''
Retail stores such as Chameleon Comics and Cards in New York, which last year saw Pikachu and other pocket monsters -- and just about anything associated with them -- fly off store shelves, are now slashing prices almost 60 percent and reducing inventories.
A pack of the basic ``booster'' Pokemon trading cards, which cost about $6 this time last year, now sell at about $2.75 at Chameleon, with a suggested retail price of $3.29, said Doug Han, manager of the store.
``At one point, all the kids wanted it, because everyone has it,'' said Chameleon owner Steve Wu.
At the height of their popularity in the key Christmas season last year, Pokemon-related products brought in about $15,000 in December alone, whereas now they bring in only about $2,500 a month, Wu said.
To be sure, not everyone says the Pokemon craze is cooling. Its popularity is still strong and growing, insists Al Kahn, chief executive of New York-based 4Kids Entertainment Inc. (NasdaqNM:KIDE - news), which licenses Pokemon products. The company's shares rocketed to 93-1/4 in November last year before falling back in days after that, and closing at 25-1/4 on the Nasdaq today.
``This has been a concept that adults never understood or supported,'' Kahn said. Talk to the kids, he says.
But even kids who powered Pokemon's meteoric rise don't seem to share Kahn's enthusiasm. In a survey reported in the July/August issue of Zillions, a magazine for children, two-thirds of all kids surveyed said the Pokemon fad was fading.
Eight-year-old Lev Pakman of New York City is one of those whose interest has waned after he had begged his mother to get him Pokemon trading cards last year because ``it was so famous.'' Today, he finds them boring and too expensive.
``It costs so much money.'' he says. ``There's no main point to it. Most of the kids in my school hate it.''
Toy industry experts such as Jim Silver, publisher of Toy Wishes, a consumer products magazine, and The Toy Book, a trade magazine for the toy industry, say the cooling of fads like Pokemon is typical in the toy world, though sales are not likely to evaporate completely.
After the initial frenzy is over, the core brand items -- trading cards and video games in the case of Pokemon -- remain strong for a period but sales of related merchandise such as T-shirts and keychains begin to peter out.
``Anything -- from Power Rangers, Teenage Mutant Ninja Turtles to Teletubbies -- after about a year to a year and a half, kids move on,'' Silver said. But ``the No.1 core items continue to sell really well.''
Analysts also caution that the Japanese creation that had kids scrambling to toystores last year could very well regain some of its past glory.
The second feature-length Pokemon movie, called ``Pokemon The Movie 2000,'' hits theatres across the United States Friday. It comes after its predecessor raked in more than $50 million at the box office in its first five days alone last November. In addition, two new Nintendo games called GOLD and SILVER slated for release later this year may revive waning interest, analysts say.
``The slowdown in Pokemon sales in the U.S. is not unexpected,'' Leibowitz said. ``Given that there's the movie and two new games to be introduced this fall, it may be premature to write its obituary.''
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