January 18, 2010
Ming Minibus

Discovery Communications and Hasbro Unveil The Hub

The HubDiscovery Communications-Hasbro joint venture president and CEO Margaret Loesch has unveiled the official brand and logo for the children's network, The Hub, set to launch in the fall. The network will reach approximately 60 million homes on what is currently the Discovery Kids network.  
The Hub will offer young viewers and their families content ranging from new comedies and animated adventures to live-action franchises and game shows, all celebrating fun and play.
Additionally, The Hub will incorporate Hasbro properties including Transformers and My Little Pony, along with Discovery Kids franchises such as Adventure Camp and Flight 29 Down as a part of its lineup. The Hub's online home, hubworld.com, will offer kids access to video clips, interactive games, and community features.

2009 Video Game/PC Game Sales Reach $20.2 Billion

Call of DutyAccording to The NPD Group, U.S. retail sales of video games––which includes portable and console hardware, software, and accessories––generated revenues of close to $19.66 billion, an 8 percent decline over the $21.4 billion generated in 2008. 
Retail sales in the PC game software industry also experienced declines, with revenues down 23 percent, generating $538 million in 2009. The total console, portable, and PC game software industry generated $10.5 billion, an 11 percent decline compared to the $11.7 billion generated in 2008.
Aside from portable hardware, which experienced a 6 percent increase in revenue in 2009, all video game categories experienced declines, with the largest decline coming from console hardware (-13 percent). Console software and portable software both experienced declines of 10 percent, while video game accessories experienced a 1 percent decline.
Call of Duty: Modern Warfare 2, (for the Xbox 360) was ranked No. 1 out of the top 10 best-selling console/portable software SKUs for 2009, while The Sims 3 took the No. 1 spot in 2009 for PC game software titles.

Avatar passes Star Wars with $491.8M in U.S.

AvatarJames Cameron's Avatar has shot past Star Wars to become the No. 3 movie on the all-time domestic box office charts. Cameron's sci-fi saga took in $41.3 million over the weekend, raising its domestic total to $491.8 million. Worldwide, Avatar has grossed $1.5 billion.
Avatar topped Star Wars, which took in $460.9 million domestically in its original run and several reissues over the years. Factoring in today's higher admission prices, Star Wars remains well ahead on actual number of tickets sold.
Avatar is closing on The Dark Knight, No. 2 domestically with $533.3 million. After that, only Cameron's Titanic, at $600 million, will remain ahead of Avatar domestically.

Sega Gets Zhu Zhu Pets Manga and Animation Rights

Sega Toys is seeking to license manga rights for Zhu Zhu Pets to a Japanese publisher for initial release this year, and plans to follow up with an animated series in 2011, according to Nikkei, via Anime News Network. Sega is also the Asian licensee for the toy line, and plans to launch them in Japan in April. China and Southeast Asia will also be countries of emphasis. 
Zhu Zhu Pets were the surprise hit of the holiday season, generating press coverage about parents seeking the hard-to-find toys for their kids. Sales hit 12 million pieces (or approximately $100 million at retail). 

Study on Toxic Chemical in Toys in India

According to the Delhi-based NGO Centre for Science and Environment, some teethers
and other plastic toys contain phthalates, a family of chemicals that can cause serious health disorders such as asthma, skeletal defects, damage to the male reproductive system, and impaired lungs in children, in addition to causing allergies if exposed to beyond safe levels.
While most developed countries regulate the presence of phthalates and some have enforced a complete ban, in India there is no regulation controlling their use.
The study by CSE found that more than 45 percent of the samples exceeded internationally accepted safe limits for phthalates.

VTech Appointed as Chuggington Global Licensee

Vtech LaptopLudorum, plc has appointed VTech as the global licensee for Chuggington electronic learning products. As part of the deal, in June VTech will launch a new Chuggington laptop, for kids ages 3 and older. The VTech Chuggington Laptop features the show’s characters––such as engine trainees Wilson, Brewster, and Koko––and their real voices. The laptop includes a Wilson-shaped selector, ABC keyboard, and the numbers 1-10 to teach kids language, numbers, logic, and fun games.



Munchkin Expands in Europe with Acquisition of Lindam

Munchkin, Inc., designer and manufacturer of infant and toddler products, has announced the purchase of Lindam, the UK baby safety brand and developer of nursery products. The purchase adds Lindam's safety portfolio to a Munchkin portfolio that includes products across infant categories such as bath, care, travel, and feeding, as well as pet categories through the company's pet division, Bamboo.
Lindam's current baby care portfolio includes safety gates, baby monitors, feeding accessories, jumpers, and other nursery products.

Konami, Upper Deck Trial Date Set

Yu-Gi-Oh!The dispute between Konami Digital Entertainment and Upper Deck Entertainment over Konami’s claims that Upper Deck counterfeited Yu-Gi-Oh! cards is heading to trial later this month. In a pre-trial judgment rendered on December 23, the United States District Court for Central California ruled in favor of Konami Digital Entertainment, granting “the Plantiff’s Motion for a finding of liability against defendant Upper Deck.”
The court also found in Konami’s favor in regards to copyrighted art on the card backs (so called “reverse art”), but ruled that Konami did not “meet their burden” as to claims about infringement of “other art/text” included on the cards. The judge also denied Konami’s motion for a “partial summary judgment” and set the trial date for January 26.

Patch Products Secures Two New Licenses

Sid the Science KidThe Jim Henson Company has granted Patch Products licenses for PBS Kids television series Dinosaur Train and Sid the Science Kid.  Patch will develop magnetic and foam activities based on Dinosaur Train and science-themed kits and toys for Sid the Science Kid. The new toys and game activities will arrive on store shelves this fall.
Patch Products has also announced that its Million Minute Family Challenge surpassed its goal of 1 million minutes by 142,432 minutes. Every year, Patch Products issues a challenge to Americans to play games for at least 1 million minutes from September 1 through December 31, aiming to encourage interaction and communication among family and friends. A total of 442 groups, clubs, classrooms, and families accepted the challenge, a 5 percent increase compared to last year. Texas finished as the highest scoring state with 165,667 minutes and the Decatur GameHawks were the highest scoring group, logging 108,000 minutes. For more information, visit www.millionminute.com or www.patchproducts.com.

Warner Bros. Signs Deal for Sesame Street Video Games

Sesame StreetWarner Bros. Interactive Entertainment has signed a multi-year exclusive agreement with Sesame Workshop for the rights to create and publish interactive video game titles based on Sesame Street. The worldwide video game agreement is in addition to Sesame Workshop’s partnership with Warner Home Video for a multi-year, exclusive home entertainment distribution deal for Sesame Street’s library, new content, EST, and transactional VOD. New DVD titles will be released this year.


Activision Plans Release of Percy Jackson & The Olympians Video Game

Percy Jackson & the OlympiansActivision Publishing, Inc. and Fox Licensing will release Percy Jackson & The Olympians: The Lightning Thief for the Nintendo DS, based on the first title of Rick Riordan’s book series. The role-playing video game allows players to navigate Percy Jackson and his fellow demigods as they battle for survival in a contemporary world ruled by Greek gods. The video game will hit store shelves February 9, while a movie of the same title will release in theaters February 12.


Learning Express Convention to Be Held in Nashville

Learning Express has announced its annual company convention and vendor expo will be held June 27–30 at the Gaylord Opryland Resort and Convention Center in Nashville, Tenn. Attendees of the Learning Express Annual Convention will include the company’s corporate staff, owners of more than 150 Learning Express toy stores, and more than 100 toy vendors.
Each year, more than $14 million in toy merchandise is purchased at the convention. The convention also hosts a gala banquet on June 30 where awards for outstanding manufacturers, as voted by Learning Express owners, will be presented.

Scholastic Announces Second Annual “Be Big” Contest

In celebration of Martin Luther King, Jr.’s Day of Service, Scholastic Media, in conjunction with HandsOn Network, has announced the launch of the second annual “Be Big In Your Community Contest,” as a part of its Clifford Be Big campaign. The campaign allows even the youngest of children to engage in service and volunteer.
Beginning February 1, the contest invites kids of all ages, teachers, parents, and community leaders to submit a “Big idea” that demonstrates Clifford’s Big Ideas (Share, Play Fair, Have Respect, Work Together, Be Responsible, Be A Good Friend, Help Others, Be Truthful, Be Kind, and Believe In Yourself) for a chance to win $75,000 in community grants. The prize money will be used towards implementing the winning proposals. This year’s grant money has been expanded from $50,000 to $75,000, thanks to the support of American Family Insurance, the first sponsor of this year’s campaign.
Scholastic will also work with the HandsOn Network to take the “Be Big in Your Community Contest” to local communities nationwide. Throughout the month of February, children will participate in Be Big in-school events nationwide. PBS Kids will feature ten days of programming, beginning today, promoting Clifford’s Big Ideas.

Hidden City Appoints Licensing Veteran

Hidden City Games, Inc. has announced the appointment of licensing veteran Sharon M. Bennett as licensing consultant of North America. Specializing in global licensing, brand extensions, and business development, Bennett will be responsible for Bella Sara’s primary retail development, licensee relations, and sales.
Previously serving as senior vice president of global licensing and strategic partnerships at Discovery Communications, Bennett was responsible for worldwide licensing operations for Discovery’s cable networks and signature brands, including Discovery Channel, Animal Planet, TLC, Discovery Kids, and more.

Fiesta Hires Two New VPs

Fiesta has appointed two new vice presidents: Michael Howe, who has been hired as senior vice president of sales, and Chris Wu, who has been promoted to vice president of product development. Howe has more than 20 years of experience in the plush field, working at companies such as Ace Novelty, Play By Play, and Toy Network/Manley Toy. Wu has worked at Fiesta for over 15 years.

MEGA Brands Announces Recapitalization Plan

MEGA Brands has announced a recapitalization plan that will shave $300 million (all amounts in U.S. dollars) in debt through new financing and share offerings. Marc Bertrand, MEGA Brands’ CEO, says the plan will improve the company’s capital structure and give it the financial flexibility to keep improving its core business.
The company will get immediate capital through a $100 million bought-deal financing led by GMP Securities and will conduct a $121 million private placement to a group made up of Fairfax Financial Holdings Ltd., some Trimark mutual funds, and Victor Bertrand Sr., MEGA Brands’ chairman; Vic Bertrand, chief innovation officer; and Marc Bertrand.
MEGA Brands has committed to a $50 million asset-based facility from Wachovia Capital Finance Corp. The company is also issuing $35.9 million worth of common shares at 50 cents per share to the secured debt holders.
The proceeds from these deals will be used to help pay down the company’s $430 million in debt. The deal will see MEGA Brands pay $215.3 million in cash to the company’s senior secured debt holders, a 70 percent recovery to the debt holders on $357.2 million owed. The company will also cancel its outstanding 8 percent unsecured convertible debentures, worth about $71.7 million, replaced with $15 million in private units. This represents a 21 percent recovery.
If approved, the transactions are expected to close by the end of March. The company should then carry about $131 million in debt, with annual interest expenses reduced to $13 million from the current $43 million. In addition to cutting annual interest payments, the plan will provide $45 million in credit to help fund product lines in 2010.
MEGA Brands executives said that its sales were higher in the fourth quarter, but did not give any specific figures. Full-year and fourth-quarter results are due out in March.

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The Toy Report

Jonathan Samet

Editor in Chief:
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Assistant Editor:
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