Yugioh Cards rival to Pokémon By KEN BELSON New York Times October 6, 2002

TOKYO - JAPAN'S economy may be in the dumps, but one industry here has taken the world by storm: trading-card games.

Three years after Nintendo's Pokémon washed over American living rooms, children and their harried parents are now immersed in Yu-Gi-Oh. Its maker, Konami, has taken a page from Nintendo and turned its franchise into a multimedia blitz, creating the Yu-Gi-Oh card game, software, cartoons and toys.

With a more elaborate story line than Pokémon and plentiful characters, Yu-Gi-Oh has surpassed Pokémon in popularity in the United States, according to Comics and Games Retailer, a trade magazine that polls retailers monthly about cards that are in greatest demand.

Yu-Gi-Oh, which translates as "Game King," is based on a comic book series that first ran in 1996 in Weekly Boys Jump, a Japanese youth magazine. The story revolves around a shy boy named Yu-Gi who fights virtual monsters that have powers gained from an ancient "millennium puzzle" that his grandfather helps him solve.

The success of Yu-Gi-Oh shows that animated characters and game software remain among Japan's hottest exports. Fans overseas like Japanese animation not only because of its shoot-'em-up action heroes but also because of its multilayered tales and elaborate plots.

As always, timing is important, and Konami's has been good. With sales of Pokémon on the wane in the past few years, children were looking for something new. Yu-Gi-Oh cards, which show monsters and the exotic weapons used to battle them, were released this spring in the United States and have far outpaced analysts' expectations, a good sign going into the Christmas season. Their American popularity has also given Konami a boost just as sales in Japan, where the cards were introduced in 1999, have slowed..

"Everything is clicking for Konami," said Zachary Liggett, an analyst for WestLB Panmure Securities in Tokyo. "Retailers in the U.S. are really pumped on Japanese content, and Konami's road has largely been paved by Pokémon."

Because of Yu-Gi-Oh's strong American showing, analysts have raised their overall projections for Konami. News that American sales of Yu-Gi-Oh cards hit 2 billion yen, or $17 million, from April through June has helped lift Konami's shares 35 percent in last two months. (Konami's American shares, which were listed last Monday on the New York Stock Exchange, closed Friday at $23.90, off 7.5 percent for the week.)

Mr. Liggett now expects Konami to earn 8.3 billion yen, or $69 million, in the year ending in March 2003, 18 percent above his earlier estimates, on revenue of about 237 billion yen. The earnings figure, he concedes, is conservative and may rise as Konami's American distributor, Upper Deck, releases more cards.

A key to the longevity of any game is how often it is expanded. Fortunately for Konami, which has produced a string of hit computer games like "Metal Gear Solid" and "Duel Monsters," just one-tenth of the 2,000 Japanese Yu-Gi-Oh cards have been translated and released in the United States. "That should keep the game going for a long time," said Joyce Greenholdt, associate editor of Comics and Games Retailer. "Upper Deck is trying to release the cards in waves and giving only a few boxes of the cards to each store at a time."

Prices range from $4 for a nine-card pack to $15 for a 50-card starter deck. But some stores charge more because of the cards' popularity.

Keeping the tension between supply and demand is crucial in the American card market, worth about $300 million in annual sales. When companies release too many cards, children are overwhelmed and run out of money before finding them all. Releasing too few can cause boredom. Worse, shortages can lead to price gouging, fights at school and headaches for parents.

Unlike Pokémon, which encouraged fans to collect the entire series, Yu-Gi-Oh is intended more as a game of strategy — a difference that should temper some of the frenzy.

In the Yu-Gi-Oh comic book series, which has sold 25 million copies in Japan so far, Yu-Gi plays a card game similar to the one released as a separate product in Japan in 1999. The game was an instant hit and there was even a riot when Konami ran out of special-edition cards at a promotional event in Tokyo. Konami also helped develop two television shows based on the comic book and designed game software for Sony's PlayStation 2 and Nintendo's GameBoy Advance. Yu-Gi has also been plastered on T-shirts, shoes, bags and stationery.

In one sign of the popularity, 30 operators at Konami's customer support center field about 1,000 calls a day from children and parents wanting to know the game's rules. Konami also sponsors Yu-Gi-Oh tournaments, including one in Tokyo in August that drew 6,000 children from six Asian countries.

The game's appeal and Konami's cross-marketing helped turn Yu-Gi-Oh into a half-billion-dollar business two years ago, when it peaked in Japan with profit margins of more than 50 percent.

Konami's margins are only two-thirds as large overseas because of translation and distribution costs. Though Upper Deck, which is privately held, does not release sales figures, the company says Yu-Gi-Oh is outselling its traditional No. 1 product, baseball cards. "Most of it has been driven purely by word of mouth, which speaks to the strength of the game," said Mary Mancera, a spokeswoman for Upper Deck.

Yu-Gi-Oh, Pokémon and other Japanese character-driven games have also made trading-card games far more popular in the United States than they were a few years ago, Ms. Mancera said. American children, it seems, are intrigued by Japanese games that involve underdogs who can outwit more powerful foes. "American kids like strong, fast and big characters," said Satoshi Shimomura, the executive producer of Yu-Gi-Oh at Konami Computer Entertainment Japan Inc. "Of course, Japanese like strong, fast and big characters, but they also like to overcome them by themselves."

Unlike Pokémon, which is geared toward elementary-school boys and girls, Yu-Gi-Oh is aimed at boys 8 to 14 who crave more sophisticated competition. The rules are simple — players start with 8,000 "life points" and attack one another using the powers on the cards until their points run out. But the varieties of cards and uses add levels of complexity.

"I beat video games so easily that they're not really a challenge anymore," said Elijah Crumpton, 12, of Denver, who spent the $600 he made washing cars this summer on Yu-Gi-Oh cards. "I like reading about the special powers, the cool pictures and the cool names."

Although Yu-Gi-Oh's story and characters are the same in Japan and the United States, the pictures have been altered to match American sensibilities. Nudity, extreme violence and religion have been excised from the American versions. For example, the Japanese card Mizuno Odoriko, or Aqua Dancer, shows a bare-breasted woman with water flowing from an urn above her. In the American version, she wears a mermaid outfit. Among others, a card that refers to witch-hunting was not released in the United States.

That, of course, means little to boys who enjoy the exclusivity of the game, which is less popular among girls and often unfathomable to parents. "Most girls are into Barbie dolls and babies," said Kieshia Lewis, another 12-year-old boy, who has 200 Yu-Gi-Oh cards. "They need to make cards with Powerpuff Girls on them so the boys don't want them." (More than 90 percent of Yu-Gi-Oh's players are boys.)

To fuel the boom, Shueisha Publishing, the original publisher of the Japanese comic book series that started the Yu-Gi-Oh rage, will introduce an English version of the comic book in the United States on Nov. 1. Konami plans to introduce the cards in Britain next month. The company is staggering the cards' introduction to keep children's interest and to extend the card's life span. The audience for cards is notoriously fickle, so companies try to manage their hits judiciously.

In the United States, Yu-Gi-Oh appears to be causing less school disruptions than Pokémon cards, which were banned by some schools. Parents and school administrators may look more favorably upon Yu-Gi-Oh because it relies on intellect; if nothing else, the card game requires players to speak to one another, and not to just stare at a video screen.

"Cognitively, kids will use their left brains to figure out a strategy, more linear thinking," said Dr. Patricia Eggleston, a child psychologist in Chicago. "From the right side, they'll pull the social skills and how to interact with others."

Still, Dr. Eggleston said the game was ultimately like others: a competition with a goal of winning. That, however, is not a bad thing, she added. "Part of the reality of growing up," she said, "is having a kid dupe you out of a valuable card."