New Monsters On The Block

Digimon aims to steal young hearts away from Pokemon

Could it be? Wes Myers doesn't like to play with Pokemon anymore--or at least not half as much as he did a few months ago. Sure, the fourth-grader from Taunton, Mass., says he still likes to trade the cards. But at his school, Pokemon toys are just not as hot as they once were. "We were more into it at the beginning of school," says Wes. "It isn't as new." Now, many of his friends have begun to watch something called Digimon on television.

And so a new toy craze starts. At least that's what the Digimon toy creators--Bandai America Inc., the company that brought your kids Mighty Morphin' Power Rangers--are hoping. Like Pokemon, Digimon is an entire society of characters, all with their own special powers and life stories, available in trading cards, stuffed animals, and action figures. Like Pokemon's menagerie before them, Digimon characters came from Japan, where they were already superstars among the younger set. Kids can collect them, trade them, and tell stories about them. They can watch them on television. In truth, there's not much difference between the two stories, except that the Digimon characters cavort in a "digital world."

So the question is whether kids will respond to a near-identical marketing approach for a toy collection that is so similar to one they already own. Digimon's creators say the answer is yes. Bandai America Chief Operating Officer Brian Goldner says that half of the Digimon toys in retailers' hands are selling each week. Now, says Goldner, the challenge is "producing enough product." Retailers agree. "Digimon is doing very well," says John Eyler, chief executive of Toys `R' Us Inc. Does that spell the demise of Pokemon? Eyler is certainly not counting them out: "Will Pokemon be as strong this year? That's not clear. But if it's even close to last year, that would be O.K."

To regain the attention of kids such as Wes, Pokemon toymaker Hasbro Inc. and Nintendo of America Inc., the licensor of all things Pokemon outside Asia, are introducing a dizzying array of new products. The Pokemon marketing team also plans to release a second movie this summer. And there will be more television shows, plus 100 new characters.

Gail D. Tilden, Nintendo of America's vice-president for product acquisition and development, predicts that all that Pokemon stuff could generate an additional $1.5 billion in the U.S. in 2000, plus $1.2 billion in Europe, where it is just being launched. That's in addition to the $1.2 billion it made in the U.S. last year. "The property is so big," says Tilden. "It's really unparalleled."

Digimon is also increasing the ranks of its 206 characters by another 200 this fall to be featured in 52 new TV episodes. Its first video game is due out this spring. So beware, unsuspecting parents. The latest toy war has begun, and you might as well be Poland.

Before it's here, it's on the Bloomberg Terminal.