Yo-kai Watch

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As bold as it might seem, calling YO-KAI WATCH a “phenomenon” in its native country of Japan is actually an understatement. The animated show, manga and video game property has reported more than $2 billion in licensed retail merchandise sales (excluding music, games and publishing) since its debut less than two years ago.

The YO-KAI WATCH™ series has been the top-rated animated show for kids ages 4 to 12 years old on TV TOKYO, and more than 8 million Nintendo 3DS™ video game units and 200 million Medals have been distributed in Japan. Earlier this year, Forbes dubbed YO-KAI WATCH “The New Pokémon” because of its sales numbers and broad appeal to children, especially boys.

With the brand’s proven track record in its homeland, it shouldn’t come as a surprise that its creators are hoping to duplicate its success. 

“This is the most successful launch of a new intellectual property in the Japanese market in more than 10 years,” says Travis Rutherford, president, licensing and retail for Evolution USA, LLC, the brand’s licensing and merchandising agent for North America. “The property’s owners are establishing the franchise here using best-in-class partners, from both a content and a product standpoint.  The TV series on Disney XD, manga series from VIZ Media, video game from Nintendo and toy line from Hasbro are being released in a tightly coordinated manner, creating great cross-fertilization for our licensed product at retail.”

LEVEL-5 Inc., the Japanese entertainment company that owns and markets the brand there, this year formed a joint venture with Dentsu Inc. to expand the brand in North America. The recently announced entity, LEVEL-5 abby Inc., retained Evolution as the brand management agency to oversee the brand with licensees, retailers and promotional partners across the United States and Canada. “Our goal is to effectively and strategically monetize the brand by bringing in all the relevant licensing partners, managing all the operational aspects of a licensing program and driving the retail development efforts across North America,” Rutherford says. 

A Strong Foundation

Disney XD in early October began airing the series, which revolves around a young boy named Nate who obtains a special watch that enables him to interact with mysterious and mischievous beings known as Yo-kai. When he befriends one of the Yo-kai, he is awarded a Yo-kai Medal that he can place in the watch to summon that Yo-kai when needed. These friendly beings are often called upon to solve everyday problems – many of which are caused by other Yo-kai. The series is distinguished from “Pokémon” and other Japanese animated predecessors in its use of humor instead of an action/adventure-based approach, Rutherford notes.

With 26 half-hour episodes of YO-KAI WATCH committed to air, Evolution is building on a solid foundation of licensing efforts that mirror and expand on those ongoing in its home country. 

Three core licensees were in place when Evolution began its work: Hasbro, the global master toy licensee (outside of Asia); Nintendo, the YO-KAI WATCH video game publisher outside of Japan; and VIZ Media, which is localizing and re-publishing the manga series that originally appeared in Japan. “With these three anchors in place and TV air slots confirmed, we went into the marketplace and discussed opportunities with other license partners in all of the key classifications,” Rutherford says. 

The first YO-KAI WATCH video game and first issue of the comic book series are scheduled to release in November 2015. Hasbro’s toy line will closely follow, with toys expected to hit shelves in January 2016. The toy line includes a watch that can be used to hold and display collectible medals, which will be sold in a blind bag format similar to trading cards. The line will include 200 medals, one for each of the Yo-kai characters appearing either in the show’s first season or the first video game title. The second watch and additional collectible medals corresponding to future show characters and additional core toys are planned to be launched in fall 2016.

    “The wide range of characters in the first season of the show drives the collectability,” he adds. “Hasbro is really cluing in on a key mechanic of the show’s storytelling, and is replicating that in their innovative products.”

The involvement of Hasbro and Nintendo ensures that the toys and video game will reach the shelves of the continent’s largest retailers. “They are selling across all of their accounts,” Rutherford says. “Working with premier partners such as these makes all the difference in building a long-term sustainable brand.”

Multiple Platforms

The television series, video game, toy line and comic book launch are the first stages of a content strategy that also will include using multiple digital platforms across various free, transactional and subscription video-on-demand services. 

“We’re not reliant on traditional television broadcast alone to get the content distributed to kids,” Rutherford says. “Kids are consuming content in a number of different ways now, so we have to be on all the applicable platforms where they are – on tablets, smartphones and other devices common in their world.”  

Licensing Partners

The full range of digital content is anticipated to launch next spring, at roughly the same time as other licensed products. “We discussed this opportunity with all key partners in other classifications and had multiple proposals from licensees,” Rutherford says, noting that many of these discussions took place during the Licensing Expo in Las Vegas earlier this year. 

“Within the past three months, we’ve made decisions on who we are partnering with by category,” he adds. “We chose with great care, settling on those partners who have meaningful relationships with retailers across multiple channels, innovative product execution, and the capacity to manage a very large franchise.”

Merchandise licensees to date include:

    •Accessory Innovations LLC and Calego International Inc., which are producing bags, backpacks, luggage, bag clips, umbrellas, rainwear, lunch bags and other accessories;
    •World Trade Golden Nugget Ltd., and H.E.R Accessories; producing jewelry and accessories;
    •PS Brands LLC, which is producing hosiery for kids and adults;
    •MZ Berger, a manufacturer of watches and clocks;
    •Starlight Accessories Inc., which is producing children’s eyewear;
    •Central Mills Inc./Freeze, a maker of t-shirts and fashion tops for children ages two and up and adults;
    •Bioworld, which is producing kids underwear for all channels and adults sleepwear, loungewear, headwear and cold weather accessories for specialty retailers; 
    •Global Brands Group (AME and Briefly Stated divisions), which is producing licensed sleepwear and loungewear for children and adults;
    •Isaac Morris Ltd., which is producing apparel for children and adults. The company is also producing apparel, novelties and accessories for inclusion in subscription crate services;
    •Radz Brands, a producer of novelty candy and candy containers including gumball machines and gum;
    •The Topps Co., which is making gummy and chocolate candy products as well as lollipops and hard candy;
    •Footwear maker Cortina Leomil;
    •Bedding, throw pillow, slumber bag, rug, kitchen, bath and home accessory manufacturer Franco Manufacturing Co.;
    •Throw blanket, character pillow and beach towel manufacturer The Northwest Company;
    •Stationery, paper goods and back-to-school product makers ACCO Brands, Brown Trout Publishers, Panini America Inc. and Pyramid America;
    •Pioneer Balloon Company, a foil, latex and stretchy balloon manufacturer;
    •Children’s book publishers Scholastic, I.D.W Publishing and Little, Brown and Company;
    •Good Stuff, a Division of Bridge Direct, a manufacturer of inflatable balls, flags, banners and stuffed vinyl novelties for the amusement channel;
    •Cra-Z-Art LLC, a full-line creative activity manufacturer of art sets, stationery, stamp kits, eraser makers, crayon and coloring products, activity kits, color by number and paper building sets;
    •Just Toys International Ltd., a maker of impulse toy items including 3D character rings, button and pin badges, key-chains and suckers;
    •Little Buddy LLC, a 3-D jigsaw puzzle figure maker;
    •MB Wolverine Holding Co. LLC, which produces a wide range of impulse and novelty toys including: dog tags, slap bracelets, iconiclips, character fun packs, 3D silicon character heads, micro builders, coin banks and collector pins;
    •KIDdesigns Inc., a premiere consumer electronics manufacturer producing speakers, headphones, walkie-talkies, karaoke players and microphones, voice changers, portable CD players and computer accessories;  
    •RedwoodVentures LLC, a maker of 3D drawing pens and accessories;
    •Rubles Costume Co., the premiere costume, mask and accessory supplier;
    •Underground Toys LLC, a maker of talking pens, talking key chains, travel mugs and other drinkware, storage containers, stress toys, wristbands, inflatables and mobile device cases;
    •Hori USA Inc., a maker of Nintendo 3DS carrying cases, game card cases and protective covers. 

Securing interest from premiere licensees has not been difficult, Rutherford notes. “It was just a matter of advising these partners how successful the brand had been in Japan in the past 18 months and sharing the comprehensive content roll-out strategy for how we’ll bring the brand to North America,” he says. 

Retail Development

In addition to securing licensees, Rutherford and his team are taking an aggressive approach to retail development. “Senior Evolution licensing and retail development executives have led the charge to educate key retailers in the industry from senior management down and from category buyers up, which has been critical to retailers’ understanding the size of the prize and how it directly affects each buyer’s line of business,” he says. “The different lines of business at retail still remain very segmented, and there’s not a lot of information sharing between the various departments. Therefore, we take the extra time to educate buyers and divisional merchandise managers as to what’s happening across the store as a whole.”

Placing YO-KAI WATCH products onto shelves that are already crowded with licensed properties aimed at children can be a challenge. “We are educating buyers as to what this opportunity is, showing them this is an innovative product and convincing them this is a property worth going on their shelf – one that will drive a significant return on investment,” Rutherford says.

The response from retailers thus far has been very positive, with Walmart, Target, Kmart/Sears, Toys R Us, Game Spot, Hot Topic and many others showing enthusiasm for the brand and its retail possibilities. “It’s hard to argue with a brand that has already sold $2 billion in product in under two years,” he adds. 

Licensees and LEVEL-5 abby will assist retailers to promote the brand within their stores. This includes providing merchandising displays and helping execute unique cross-category product initiatives such as gift with purchase programs and multi category (front of store or end-cap) product exposure, as well as securing in-store product exclusives from key licensees.

LEVEL-5 abby, Evolution and all licensees are careful not to overpromise specific results to retailers, but all involved feel the YO-KAI WATCH rollout strategy is careful and robust enough to be successful not only next year, but for the next several years. “All the partners involved in the franchise are looking at this opportunity as a long-term brand initiative,” he adds. 

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