Videogame publisher Level-5 is revamping its licensing program for Yo-kai Watch in North America potentially with narrower distribution and fewer licensees, said Level 5’s Simon Waldron.

The decision to chart a new course about 18 months into 3-year licensing deals follows the animated series posting “mixed results” in merchandise sales in North America. Indeed Hasbro, which is the global master toy licensee for Yo-kai Watch, has cited declining sales of Yo-kai Watch-related toys in earnings reports.

With a third season of Yo-kai Watch being readied, Level-5 licensees will sell through existing inventory as the programmed is being reshaped, says Waldron. In addition to the new season, the company is readying a mobile game to give the property added exposure in North America. While the property has a strong presence on the Nintendo 3DS handheld – a new game is slated for release here in October – mobile titles are more popular in North America.

Waldron, who joined Level-5 from Mattel earlier this year as its first North American SVP for Marketing and Licensing, said the company may have been overly aggressive in its approach. “Sometimes you have to let the story incubate and evolve” before a licensing program in launched and “we tried to do too much, too soon.”

Revamping the licensing program may mean “starting things on a smaller scale” in fewer categories while interest in the property builds, says Waldron.

“We need to be happy with smaller steps and re-platform ourselves to keep it going with like-minded partners,” says Waldron. “There is an element of mass market with Yo-kai Watch, but does that mean it is Walmart or Target or does that mean there’s a better strategy at Walgreen’s and other drug stores that also have a lot of doors? Right now we have an open mind; we aren’t setting ourselves a definitive target and we have to figure a few things out as we go along.”

While Yo-kai Watch merchandise sales struggled in North America, product revenue in Japan, Continental Europe and Latin America was strong, with more time between the series launch and licensed products being available at retail, says Waldron. The series launched in the U.S. in 2015 with product available almost immediately.

Level-5 plans to continue to work on the Yo-kai Watch program in North America with its agent Evolution, which signed the initial licensees. And the series will continue to air on Disney XD.

“We don’t have any complaints with any of the partners and they are all doing a fantastic job,” says Waldron. “It is a shame the results are mixed, but how many things really go in a straight line?

Contact:

Simon Waldron, SVP Marketing and Licensing, 424-214-7118, s_waldron@level5abby.com