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March 16, 2006

No joke, Microsoft hires Fergy Fudgehog

Posted by David Hunter at 1:34 PM ET.

We now have an explanation of the mysterious Microsoft deal with 4Kids Entertainment that was announced in January. According to the press release – “Viva Piñata” Universe Revealed — Entertainment Property Brought to Life by Microsoft, Rare and 4Kids Entertainment:

Spontaneous and fun, piñata-filled world showcased via animated television series, immersive Xbox 360 video game and wide range of merchandise.

Microsoft Game Studios and 4Kids Entertainment, Inc. (NYSE: KDE) today celebrate the introduction of “Viva Piñata,” a high-energy, mass-appeal entertainment property created by Rare Ltd. that brings a vibrant world of living piñata animals to video games, television and beyond. The “Viva Piñata” universe showcases an engaging cast of colorful, wild-roaming piñata animals that entertain and challenge imaginations.

“Viva Piñata” will offer a number of entertainment elements enjoyable for everyone — from kids to adults. The “Viva Piñata” world will include a Saturday morning 3-D animated television series, slated to premiere this fall on 4Kids TV™ on FOX, that is produced and created by 4Kids Entertainment, known for such powerhouse properties as Yu-Gi-Oh!®, Pokémon®, Cabbage Patch Kids® and Teenage Mutant Ninja Turtles®. An immersive video game developed by Rare Ltd. exclusively for the Xbox 360™ video game and entertainment system is scheduled to debut this holiday worldwide, enabling gamers to create and customize piñata-filled adventures in their own evolving world. The 4Kids Entertainment licensing program will result in additional licensed products launching in 2007. Additional information can be found at

Following the strategic alliance previously announced in January 2006 with Microsoft, 4Kids’ exclusive representation agreement includes all broadcast, home video, music and merchandise licensing rights on a worldwide basis for the “Viva Piñata” property.

I have to admit that I went to the promotional website to check out all the details because I couldn’t help wondering how they were going to handle the messy problem that pinatas exist to be bashed to bits by kids with bats. Let’s just say that the backstory is rather like Santa Claus if he got pummeled at every house he visited and then patched up before the next one. One of the main TV characters, the oddly deformed Fergy Fudgehog, “is nervous, high-strung and prone to panic attacks” because of “the thought of being bashed open for his candy.” Lots of crowd appeal so far.

However, I’m rather less interested in whether “Viva Piñata” will be a success than I am in why this is a reasonable investment for Microsoft. The kiddie fad merchandising business is big, but there are many players and many failed attempts for every one that is a success. Presumably the risk is decreased by hooking up with 4Kids although their current lineup (see also [1]) doesn’t show many recent winners other than snagging the Bratz doll cartoon franchise.

The story in the press is that this is an attempt to “expand the audience for its new Xbox 360 video game console beyond young, male ‘hard-core’ gamers” and I suppose claiming it as a marketing stunt is as good a rationale as any. However, the temptation is to mark it down as a typically weak attempt of a cash-rich company to expand beyond their core business. “Viva Piñata” may well be wildly successful, but it makes one wonder what’s next, Broadway shows or movies? Oh wait, Microsoft is already doing the latter.

Update: Things aren’t looking that good for 4Kids according to the AP:

Shares of 4Kids Entertainment Inc. tumbled in Thursday trading after an analyst cut his investment rating and gave a grim outlook for the company’s business.

A day earlier, 4Kids, which licenses popular characters for games and toys, posted a lower fourth-quarter profit as its revenue sank more than 21 percent. The company blamed the decline from a drop-off in sales of licensed merchandise.

The dismal report drew negative reactions from analysts. Robert Routh, a Jefferies & Co. analyst, said 4Kids’ quarterly results were “well below par,” adding that 4Kids doesn’t have any growth catalysts in sight.

As for the Microsoft deal:

… Routh cast doubt on the development. “Although sounding good,” he wrote, “predicting the success of the property at this point is very difficult.”

Filed under Alliances, General Business, Marketing, Microsoft, Public Relations, Xbox

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3 Responses to “No joke, Microsoft hires Fergy Fudgehog”

  1. Get ready for Viva Pinata -- Microsoft News Tracker Says:

    [...] “Today is an exciting day as we continue to reach out to new audiences and introduce families to a vibrant world that will not only entertain, but also inspire creativity and imaginations on many levels,” said Shane Kim, corporate vice president of Microsoft Game Studios. “People of all ages are invited into the Viva Piñata universe, where they will meet a cast of wacky characters and enjoy an immersive interactive experience with the Xbox 360 game and Viva Piñata merchandise.” If hype were horses, marketers would ride. I’ve swatted this pinata previously and not much came out, but then I’m not part of the target demographic. Maybe the tykes really do want an immersive interactive experience with merchandise. Filed under Alliances, Xbox, General Business, Public Relations, Marketing, Microsoft   [Permalink] [TrackBack] [...]

  2. That’s show biz! -- Microsoft News Tracker Says:

    [...] And what would a tale of Microsoft in Wonderland be without a mention of Viva Pinata, Microsoft’s attempt to build a younger (ages 6-11) Xbox 360 demographic, with a combination of a video game (”most important Xbox 360 release of the year“), TV show, and kiddie merchandise. This unique effort got a goofy puff piece in the Wall Street Journal this week where Microsoft is identified as a “Silicon Valley giant” and the full force ad strategy is described as “viral marketing”, but here’s the nut: [...]

  3. Founders leave Microsoft’s Rare game design studio -- Microsoft News Tracker Says:

    [...] “Chris and Tim have helped shape Rare into the world-renowned development studio that is it today and their impact on the videogame industry as a whole is well known. They are simply leaving to pursue other opportunities and we wish them luck in their future endeavors.” Microsoft acquired Rare 4 years ago from Nintendo. While I don’t think much of the TV show and merchandise part of the Viva Pinata goat rodeo, the game itself has been getting good reviews, but apparently failed in its mission to broaden the Xbox 360 demographic to a “family gaming” audience. Simon Carless at GameWatch suggest some reasons why sales have been so dismal, one of which has particular pertinence here: Sorry, Rare, but your reputation among a lot of the hardcore gamers who currently own an Xbox 360 just isn’t that good. Perfect Dark Zero and Kameo were both flawed attempts at X360 launch titles that probably got overrated by the press along the way, further disenchanting people who picked them up at hardware launch. And the Conker update felt pretty underwhelming – so I think that a family-oriented game done by the current Rare team just didn’t appeal to a lot of people. Game design is like movie production with a lot of duds for every blockbuster and constant shifting of the players in pursuit of the latter, so this isn’t a big surprise. Overall this doesn’t mean much for Microsoft other than once again raising the question of why they’re in this business in the first place. Filed under Acquisitions, Xbox, Microsoft [...]

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