Bandai Co., Ltd. is the third-largest toy manufacturer in the world.
The company is best known for products derived from popular television
and comic book characters such as Power Rangers, Gundam, and Ultraman.
These range from action figures and their accessories to video game
software, clothing, and candy. The firm has also had success with
faddish toys like the "digital pets" Tamagotchi and Digimon and other
ventures that include selling toys in vending machines and providing
digital content online and through cellphones. Other Bandai units make
animated television programs and movies, design and manufacture
amusement machines and amusement centers, make stationery, and sell,
lease, and manage real estate properties. Based in Japan, where it is
the number one toymaker, Bandai distributes its products worldwide.
Early Years
Bandai's roots date to post-World War II Japan, where Naoharu
Yamashina, a war veteran who had lost an eye in combat, was struggling
to make a living. The son of a rice retailer, Yamashina had studied
business in high school, and after the war he began working for a
textile wholesaler in Kanazawa run by his wife's brother. Business was
slow, and when a neighbor told him of the potential for success in toy
sales, Yamashina convinced his employer to send him to Tokyo to try this
new field. Putting in long hours there with his wife, he gradually
built up a small toy distribution business.
In 1950, Yamashina took control of the toy distributorship and
renamed it Bandai, which was derived from the Chinese phrase for "things
that are eternal." At this time the firm was mainly selling celluloid
and metallic toys, along with rubber swimming rings.
Deciding to add an original product to its lineup, in September of
1950 Bandai introduced the Rhythm Ball, a beach ball with a bell inside.
The Rhythm Ball initially suffered from a high rate of defects, but its
quality was improved and the company soon added other products such as
the metal B-26 Night Plane. In March 1951, Bandai began to export
inexpensive toys like metal cars and planes to the United States and
other foreign markets. The growing company built a new shipping and
warehousing facility in the spring of 1953, and in the summer added
research and development, product inspection, and transportation
departments.
In early 1955, Bandai established a manufacturing facility, the
Waraku Works, and during the summer began construction of a new Tokyo
headquarters and introduced a new "BC" logo. The fall of 1955 saw the
firm offer its first product guarantee for the Toyopet Crown model car.
Bandai highlighted this in television commercials that began airing in
1958, which used the phrase, "The Red Box means a BC-guaranteed toy."
The following year a Cars of the World model line was launched, and the
company's logo was redesigned to stress its emphasis on quality. In the
early 1960s, Bandai began to establish direct overseas sales and opened
an office in New York.
Character-Based Toys Debut in 1963
In 1963, Bandai introduced its first toy based on a children's
television character, which was called Astroboy. The firm would go on to
refine a strategy of helping to fund a new program's development and
then sponsoring its episodes as they were broadcast, running ads for
derivative products that might include action figures, toy vehicles, and
costumes. Beginning in 1966, Bandai found success with toys based on
Ultraman, a giant, caped, metal-skinned hero who fired laser beams and
battled monsters. The live-action program and some of its related toys
were later imported to the United States, though their impact there was
slight. Other Bandai character products were taken from manga, the
serial comic books which were hugely popular in Japan. To keep up with a
growing demand for its toys, Bandai built the Toy Town Manufacturing
Complex, which opened in October of 1965.
In the latter half of the 1960s, the company had hits with Water
Motor, Thunderbird, and Naughty Flipper toys, as well as Crazy Foam. In
the fall of 1969, Bandai formed a Travel Services unit and acquired an
additional factory in Shimizu City, where it would manufacture plastic
model toys such as the World Car, Thunderbird 2, and Beetle series.
The firm established Tonka Japan in 1970 in a marketing tie-up with
that company, and a year later it added a Models unit and created Popy
as a manufacturer of character toys. In 1975, Bandai again changed its
logo and trademark designs as part of the launch of a new worldwide
marketing effort. Ties were established in October of that year with
U.S. model maker Monogram, and in 1976 toy giant Mattel began selling
Bandai's Mazinger Z action figures in the United States under the brand
name "Shogun." Bandai entered the publishing business in the fall of
1976 with "The Moving Picture Book," later formally establishing Bandai
Publishing as a subsidiary.
In November of 1976, the company opened a new factory for Popy toys
and in April of 1977 began marketing encapsulated toys in vending
machines. During the same year, the firm founded its first overseas
manufacturing entity, Bandai (H.K.) Co., Ltd., in Hong Kong. In 1978,
Bandai America, Inc. was formed to market the company's toys in the
United States, and the following year the B-AI Electronics and B-AI Mibu
units were formed.
Makoto Yamashina Takes Control of Firm: 1980
In 1980, Naoharu Yamashina's son took over the job of president from
his father, who continued to serve as board chairman. 35-year old Makoto
Yamashina, who had a degree in economics from Keio University, had
originally worked at a publishing firm, where he wanted to become an
editor. When he was instead assigned to sell encyclopedias, he left to
join his father at Bandai.
After taking over as president, the aggressive younger Yamashina
fired many of his father's senior executives and replaced them with
people closer to his own age. This was a shocking move to many in the
"lifetime employment" culture of Japan, but Makoto Yamashina was
interested in operating his company in a different way, modeled more on
the U.S. style. He also began making changes to the traditional
distribution pattern for toys, dealing directly with large retail chains
rather than selling to them through middlemen.
Shortly after he took control, Bandai launched its Gundam toy line,
based on a cartoon program about futuristic warriors. The series was
popular, and, like Ultraman, Gundam became a long-term moneymaker for
the company. In 1981, the firm marketed its first candy products and
expanded to Europe, opening French and Italian subsidiaries. These were
followed in 1982 by Dutch, British, and Australian branches. The year
1982 also saw Bandai form a department to develop and create original
animation and film projects, and a new subsidiary, Emotion, which began
to open video shops in Japan. In 1983, the company added an apparel
department, founded a division called A.E. Planning (later Bandai
Visual), and launched its first original feature film, Daros, which came out in the fall.
Gobots Invade America: 1984
In 1984, Bandai had another go at the U.S. market with toys called
Gobots, which were Americanized versions of the popular Machine Robo
line that had been available in Japan and elsewhere for several years.
Gobots were mechanical creatures that could change into vehicles and
fight battles against a series of evil counterparts. Despite the best
efforts of Bandai and Tonka, their U.S. distributor, the Gobots were
ultimately displaced by the rival Transformers, which were marketed by
toy giant Hasbro and based on a line made by a Bandai competitor.
Transformers were larger, and their associated television program was
perceived as better than one featuring the Gobots, while Tonka also had
some problems supplying retailers with the toys when they began to sell.
It would be almost a decade before Bandai would again make an impact in
the U.S. market.
Meanwhile, the company had begun expanding its operations in Asia,
opening a second plant in Hong Kong and forming a Chinese joint venture
called the China Fuman Toy Company. Bandai was experiencing a sharp
decline in sales at this time, with 1985 revenues of 70.7 billion yen
($495 million) down significantly from the previous year's figure of
84.5 billion yen. The company went public with a listing on the Tokyo
Stock Exchange's Second Section in January of 1986, but due to the
lingering sales downturn cancelled a secondary offering slated for early
1987. A line of products tied to a hit Japanese cartoon and comic book
series, Dragon Ball, was one bright spot for the company, as was the
Kitty Stick furry toy.
As part of its plan to move all manufacturing abroad, in March of
1987 the company formed a joint venture in Thailand, Bandai and K.C.
Co., with Imperial Thai Toy. Bandai also moved the production and
marketing staff of its overseas division from the firm's headquarters in
Tokyo to its Hong Kong subsidiary. Other ventures aimed at
strengthening the bottom line included branching out into non-toy areas
such as health equipment and video sales. In the latter category, Bandai
reached an agreement with the Walt Disney Company to market up to 150
of its video titles in Japan for a two year period.
In 1989, the company moved into a new headquarters building in Tokyo,
and entered the music business by forming the Emotion label and
establishing a relationship with the firm Apollon Music Industry. The
year also saw opening of the Ultraman "Shot M78" retail outlet. In 1991,
Bandai became 5 percent owner of a $200 million satellite-based
video-on-demand startup called Entertainment Made Convenient, formed a
sales subsidiary in Taiwan, and began marketing Chara-Can, its first
line of toys packaged with drinks.
Power Rangers Make American Debut: 1993
In 1993, Bandai had its biggest international success to date with
toys based on the live-action show Mighty Morphin' Power Rangers (called
Jyu Rangah in Japan when originally shown there). The series once again
featured superheroes that battled the forces of evil. Unlike many such
exports, the live-action Power Rangers show was partially reshot for
North American broadcast, adding some non-Asian characters and
increasing the ratio of females to males. Soon after its U.S. debut in
August 1993 on the Fox network, the program became a surprise hit.
Demand for Power Rangers toys quickly outstripped their availability,
leading to frantic scenes in stores as parents tried to secure them for
their children.
Working to take advantage of this success, in March 1994 Bandai
announced it would build factories in Vietnam and Mexico to increase
output as well as to lower costs. The firm was hoping to triple
production of Power Rangers toys and also add new items to the line, as a
Power Rangers motion picture that was in the works was expected to keep
interest in the characters high for the foreseeable future. Bandai was
now focusing more and more on the international marketplace, as the
Japanese toy market was shrinking due to a declining birthrate in that
country.
Despite the company's success with Power Rangers, it experienced a
sizable earnings loss for the year as the result of a February 1993
decision to end an agreement with Nintendo to market that company's
video game equipment and software in Europe. Several of Bandai's
regional subsidiaries experienced drastic revenue drops, and the firm
was forced to write off billions of yen worth of outdated games and
players, leading to a loss of $18.6 million for the fiscal year.
In its home country, Bandai's reach now extended beyond toys to such
items as candy, clothing, shampoo, personal organizers, and word
processors. An estimated 20 percent of toy-store shelf space in Japan
was occupied by the firm's products. Bandai continued to sponsor a
number of cartoon programs on television, notably Pretty Soldier Sailor
Moon, in which five young girls used the power of the moon to combat
aliens, and Crayon Shin-Chan, a program about a mischievous preschooler
that was watched by viewers of all ages. The company launched about 60
new characters each year, and when one of them caught on marketing and
manufacturing would be ramped up to flood stores with products. Bandai
might introduce--and pull from the market--between 8,000 and 10,000
items per year, most of which only appeared in Japan. By this time the
firm was manufacturing just a quarter of its own products, down from 45
percent in 1988, with the rest contracted out. Character-based items
accounted for more than 80 percent of revenues. Other developments at
this time included the purchase of majority ownership in Sunrise, one of
Japan's top animation companies, and participation in a joint venture
to build a theme park near Tokyo Disneyland.
In November 1994, Bandai took one of its biggest risks to date when
it announced it would develop, with computer maker Apple, a multimedia
device that would plug into a television monitor and could be used for
game play and Web browsing. To be called "Pippin," the product would
retail for approximately $500, considerably less than a computer but
more than a typical video-game player. It was to use CD-ROM discs that
would also be playable on Apple computers. The machine could be upgraded
with purchase of a keyboard and other peripherals for use as a word
processor. Bandai subsequently formed three new U.S. subsidiaries to
increase its presence in that country, including Bandai Digital
Entertainment, Inc., which would market Pippin.
In March 1996, the Pippin Atmark, as it was now called, was
introduced in Japan. Its $620 price tag was almost 25 percent higher
than originally projected. Reviews were mixed, with a typical response
being that the machine was overpriced as a video-game platform but
under-equipped as a computer. Both Bandai and Apple had high hopes for
Pippin, as the Power Rangers phenomenon was in decline and Apple was
increasingly losing its market share to Windows-based equipment. Bandai
officials admitted that the firm was not making money on Pippin players
but expressed confidence that sales of software and subscriptions to a
Bandai-owned online service would make it profitable.
Tamagotchi "Virtual Pet" Takes Japan By Storm: 1996
In November 1996, a toy designed by former housewife Aki Maita was
launched which would become the company's next blockbuster hit. This was
the Tamagotchi, an electronic egg-shaped device attached to a keychain.
A small screen on the front displayed an image of a chicken-like
creature, which would have to be "cared for" by manipulating several
buttons. If it was not tended to, the creature would die; by pressing a
button, another creature could be hatched. If cared for properly, the
character could grow and change, "living" for up to several weeks. The
toys quickly became popular in Japan, perhaps in part because they
annoyed parents, who had to go to great lengths to secure them, after
which they were often faced with babysitting the Tamagotchi when the
child had other responsibilities.
By February 1997, Bandai was so far behind in filling orders that it
issued a public apology, at the same time launching Tamagotchi version
2. Tamagotchis were so difficult to obtain that some Bandai employees
reported being threatened with harm by Japanese "Yakuza" gangsters if
they would not turn over copies of the toys, which were reportedly
selling for as much as ¥50,000 on the black market, 25 times their list
price. New variations were soon in development, including Tamapitchi, a
pair of cellphones that could send an animated character from one device
to another, enabling it to mate and create a third creature.
While all this was taking place, Bandai was also laying plans for an
October 1997 merger with video game giant Sega, which would create an
entertainment conglomerate on par with the Walt Disney Company. Bandai's
employees showed strong opposition to the move, however, and industry
analysts were not enthusiastic. In late May, Makoto Yamashina abruptly
called off the deal, simultaneously tendering his resignation as head of
the company. He was replaced by a Bandai veteran, Takashi Mogi, who had
earlier helped salvage several troubled subsidiaries.
Along with the turmoil caused by the cancelled merger, Bandai was
also suffering from the failure of Pippin, which was discontinued in
March after total sales of just 42,000 units worldwide. The misfire
would end up costing the company more than $200 million in write-offs.
Tamagotchi sales had now peaked in Japan, but the product's launch in
the international market had just begun and it was proving to be nearly
as successful abroad. Tamagotchi spinoff items such as clothes and
video games were already in the pipeline, as was followup DigiMon, which
could be connected to another toy for battles, the winner gaining some
of the loser's strength. By the end of 1997, 40 million Tamagotchis had
been sold worldwide. On a sad note, in October 1997 Bandai founder
Naoharu Yamashina passed away at the age of 79.
In March 1998, the firm opened its first Ultraman Club, which
contained shops and amusement machines. The club, one of a projected
chain of ten, would be used in part for researching toy trends. A
restructuring also took place in the spring which realigned the company
into ten units that included Toys, Entertainment, Service, Production,
and Images and Music. Other new developments of the year included
formation of a U.S. home video division, creation of a line of
character-based gardening tools, and the introduction of "Silent Shout,"
a lollipop which broadcast music into a consumer's head through
vibrations in the candy's battery-powered handle. A popular toy of this
period was the hyper yo-yo, which had a special bearing inside that
allowed more complex movements than a standard yo-yo.
In the spring of 1999, Bandai introduced another new product,
WonderSwan, a handheld electronic game toy which could be used by itself
or connected to another unit or a computer. It had been designed by
Gunpei Yokoi, creator of Nintendo's similar Game Boy. In the spring of
1999, the company also changed its top leadership, with Takeo Takaso
becoming president and Yukimasa Sugiura CEO and chairman. Takashi Mogi
had stepped down because of the company's poor recent financial
performance, which came as the Tamagotchi craze burned itself out.
Makoto Yamashina, who had been serving as chairman since stepping down
as CEO, was named honorary chairman.
Mattel Buys into Bandai: July 1999
In the summer of 1999, Bandai announced it was selling a 5 percent
stake in the firm to toy industry leader Mattel, Inc. as the first step
in a new cooperative marketing agreement. Bandai would have the option
of buying 5 percent of Mattel as well. The move gave Bandai its first
presence in Latin America, while Mattel would be strengthened in Japan,
where its prior efforts had met with little success. Bandai would
continue to distribute its own toys to the United States in the short
term. Other projected benefits of the union were mutual development of
new toys and sales of Bandai products through a Web site Mattel was
preparing to launch. Bandai had recently also joined with seven other
companies to form a joint venture called e-Shopping Toys Corp. to sell
toys on the Internet. Another joint venture was announced a few months
later in which Bandai and Japan's other top three toy makers would
produce robot toys. The company was now increasingly focusing on
technology-based offerings, including robotic pets, video and computer
games, and digital content provision.
Bandai's revenues were dropping off at this time, but reorganizing
efforts were paying off with an increase in net earnings. For the fiscal
year ending in March of 2000, the company reported sales of ¥208.62
billion ($1.91 billion) and net earnings of ¥1.28 billion, up from the
previous year's loss of ¥16.4 billion.
In the spring of 2000, Bandai announced it would pay a bonus of ¥1
million for each baby an employee had after their second child. Japan's
birth rate was at an all-time low, and Bandai's offer was the most
generous to date of many that companies were making in an attempt to
reverse this trend.
The fall of 2000 saw Bandai spin off a recently created cellphone and
Internet content provider unit to create wholly owned subsidiary Bandai
Networks Co., Inc. In January 2001, the firm sold a 50 percent stake it
owned in Upper Deck Group, a California-based trading card maker. Upper
Deck would continue to make cards featuring Bandai characters such as
Gundam, which had only recently been introduced in the United States.
The company also sold one of its Thai manufacturing plants and
consolidated production there at a single facility near Bangkok, causing
the loss of a number of jobs. A Chinese plant had been sold several
years earlier.
Bandai's financial picture continued to improve in 2001, with numbers
released in the spring for the preceding fiscal year showing profits
jumping to ¥12.9 billion on sales of ¥217 billion. In July, a joint
venture was formed with two Korean firms to create Bandai GV Co., which
would develop online games for the Japanese market. The company also
announced it would introduce a higher-priced line of capsuled toys,
which included such items as a digital watch priced at ¥300. In the
fall, the firm began offering shares of its Bandai Visual unit on the
JASDAQ Stock Exchange and formed a joint venture in Korea with several
Japanese and Korean firms called Daiwon Digital Broadcasting Co. Ltd. to
broadcast animated programs via satellite under the name AniOne TV.
In March 2002, another joint venture, Bandai Channel Co., was
launched to provide digital content to computers and video game
terminals that would be based on characters such as Gundam. The fiscal
year just ended proved to be the firm's best ever, with earnings hitting
a record ¥21.99 billion ($170.7 million) on sales of ¥227.93 billion.
In the summer, Bandai bought Tsukuda Original Co.--a doll, toy and
software maker--to help broaden the firm's offerings. The year 2002 also
saw Bandai begin construction of a new ¥4 billion headquarters building
in Tokyo. Built on land near the company's existing offices, it would
feature a Bandai Museum exhibiting toys from the firm's entire 52-year
history. The 15-story facility was expected to open in April 2005. In
the fall of 2002, Bandai announced it would revive the Strawberry
Shortcake line of toys, which had been popular in the United States
during the 1980s. Thirty items were to be released, retailing at between
$3 and $20. In January 2003, the recently-purchased Tsukuda Original
was sold to Wakui Corporation. Shortly afterwards, Bandai announced that
the firm's structure would be shifted to a holding company pattern over
the next several years, with all of its various divisions spun off into
wholly-owned subsidiaries.
After more than a half century, Bandai Co., Ltd. had grown to become
the third-largest toy maker in the world. The firm continued to offer a
wide range of character-based products as well as an ever-changing
lineup of electronic toys, videos, video-games, clothing, capsuled
items, and food. The multi-faceted firm was also increasingly expanding
into the digital realm with the offerings of its Bandai Networks Co.
unit and a series of joint ventures.
source:www.fundinguniverse.com
The
RX-78's initial concept was that of a powered armor, the primary design
for Yoshiyuki Tomino's proposed series Freedom Fighter Gunboy. The
series later changed its name to Mobile Suit Gundam and Kunio Okawara
was given Tomino's concept to shape into a finalized design for the
anime. Okawara created multiple designs before settling on the current,
samurai-styled design for the anime in 1979.
