The beginning of 2009 through the end of 2010 is what I like to call 4Kids’ Pre-Death Dead Period. They weren’t licensing anything new because they had adopted a “Screw Japan and Anime” attitude, only premiering Yu-Gi-Oh! 5Ds (Ironically an anime from Japan…) and continuing Chaotic, barely got the broadcast rights for a couple shows, and just stagnating for the most part. Even 2011 was largely boring barring one semi-major note we’ll get to next time, but they licensed one anime in that year so I didn’t count it. I’m just going to plow through this period to get to the more interesting stuff.
In 2009 the only shows that premiered brand-new on The CW4Kids, besides Yu-Gi-Oh! 5Ds, were acquired shows – Huntik: Secrets and Seekers, and Rollbots – the former of which being another show by Winx Club’s Iginio Straffi, so I’m sure he was thrilled to be associated with 4Kids again. Huntik lasted two seasons, but it seems only season one aired on The CW4Kids, and Rollbots was canceled after one season.
Outside of the previously mentioned shows ending this year, the only other news on the 4Kids front was their continued downward financial spiral. That’s right, everyone. It’s time to have some fun with FINANCIAL REPORT ANALYSIS! 😀
(Small note, the financial reports from here on sometimes have information on past reports that varies from the report that came out that year. The only reason I can give for this is that they likely had to redo their figures after certain revenues or expenses were reported after the fact. The figures are never so different that they really matter, especially the end net losses/income, but I thought I should mention it in case people wonder why there are inconsistencies between some posts on the specific numbers. I typically went by what that year’s report stated when I wrote that specific section, but technically speaking the following year’s report is probably more accurate.)
It was reported by paidContent that 4Kids had “put itself up for sale.” although 4Kids refused to comment on what they wrote off as rumors.
In Q1 of 2009, their revenue was down, $8.9mil, compared to $15mil in Q1 of 2008. They had a slightly less bad net loss of $2mil reported compared to $6.4mil in Q1 of 2008.
In Q2 of 2009, revenue was $4.4mil, down from Q2 of 2008 with $16.5mil. It suffered a net loss of $13.8mil compared to $5.5mil in Q2 of 2008.
In Q3 of 2009, revenue was $7.27mil, compared to $17.8mil in 2008, with a net loss of $5mil compared to about the same with a loss of $5.3mil in Q3 of 2008.
As the recession was ending, 4Kids was starting to pick up, but there was additional and devastating damage. In Q4 of 2009, 4Kids reported $16.1mil in revenue, up from $12.8mil in 2008, partially because they sold the license to TMNT to Nickelodeon at that time for $9.8mil. However, it also had a net loss of $21.3mil.
Overall, for the year, they had a net revenue of $36,783,000 compared to $57,201,000 in 2008. Their costs were down a little bit with $80,298,000 compared to $88,918,000 in 2008. They would experience a net loss of $52,456,000 compared to a loss of $36,819,000 in 2008.
As previously discussed, one of the big factors there was the $20mil worth of charges related to carrying leftover and returned Chaotic merchandise and their film inventory as well as money still owed to CUSA and Apex for their share of the production costs on the cartoon, However, there were other factors in play as well.
According to Al Kahn, one of the most damaging losses that year was when Lehman Brothers went bankrupt. 4Kids had over $50mil in illiquid auction rate securities at Lehman. In the financial report for 2011, it states that they were filing a proof of claim for $31,500,000 plus interest, which would probably be around $50mil as Kahn claimed. In the end, they settled for a mere $489,000, which means they took a hit of around $49,500,000, which, let me check my notes…..was uh….not good.
In lawsuit land, 4Kids was clearing up their issues with Fox and paid them $6,250,000 in settlement money.
Upper Deck also sued Bryan Gannon, the head of Chaotic USA, TC Digital Games and TC Websites. Gannon used to be an executive at Upper Deck, and they were claiming he used confidential information and trade secrets obtained from his time with Upper Deck (specifically the years 2002-2003) for use in the development of the Chaotic game. However, on October 5, 2009, Upper Deck voluntarily dropped the lawsuit without prejudice.
Jumping into 2010,
Q1 revenue was $4.2mil, TCG returns were basically nothing at $7,000. In fact, overall in its final year, TC Digital Games, TC Websites, IE Chaotic would only earn about $274,000 in 2010 before they all ended with $6,489,000 in total losses for the year.
Q2 revenue was down to $2.5mil, attributed to reduced leftover returns from TMNT and decreased returns on Dinosaur King merch, but Yu-Gi-Oh! was slightly up. Television sales via advertising were also down for both Dinosaur King and Chaotic.
On May 28, 2010, 4Kids was officially suspended from the New York Stock Exchange for failing to maintain an average global market capitalization of at least $15mil over a 30 day trading period. 4Kids would move its trading to the OTC Bulletin Board on June 1 under the symbol KIDE.
Q3 revenue was down from 2009 with $2,986,000 from $5,312,000. This was also the last quarter in which Chaotic was a factor as they had shut down TC Digital Games and TC Websites in September 30, 2010 and discontinued all support for the Chaotic game on October 1, 2010. They hoped doing so would save $1mil per quarter. To put their situation into perspective at this point, they were citing their failing performance on the lower returns from Monster Jam, which is a monster truck rally they had licensing rights to for many years, and the American Kennel Club. However, declining numbers across the board were also cited. Basically, all of their old remaining properties were decreasing in popularity while their new properties just weren’t all that popular from the start.
Q4’s revenue was $4.8mil, which was the best of the year, but this was down drastically from $16.2mil from 2009’s Q4. Expenses were down to $7.4mil compared to $21.3 mil in 2009’s Q4.
In the end of the year, 4Kids had $14,478,000 in revenue, primarily attributed to Yu-Gi-Oh! (44% of revenue) and residuals from Pokemon (21%) compared to $34,180,000 in 2009, and they had a net loss of $31,640,000 compared to $52,456,000 in 2009.
Al Kahn was quoted in the Q4 2009 conference call as saying,
“I guess there is really no covering up that this has been a hideous year for 4Kids and for our shareholders and for our employees.”
He put most of the blame pretty squarely on Chaotic, basically saying that, if he knew then what he knows now in regards to Lehman Brothers going under and the recession, he wouldn’t have taken the big financial risk with Chaotic, especially since it was still technically underperforming a little even without those factors in place.
Even though…like….no shit, Dick Tracy. Most people wouldn’t undertake huge financial risks if they knew a massive economic downturn and a significant financial disaster were on the horizon.
The CW4Kids changed their name to Toonzai, inspired by Toonami, on August 14, 2010. In addition, a new anime title finally arrived on the block – Dragon Ball Z Kai, which was a remastered recut version of the original Dragon Ball Z series with much less filler, fixes to animation issues and widescreen format.
While 4Kids did not dub Kai, Funimation did, the CW/4Kids acquired the broadcast rights to DBZKai, which meant they had to make edits to make it suitable for their broadcast, most notably censoring injuries, blood, violence, coarse language, many incredibly confusing edits and, most famously, changing Mr. Popo to an insanely bright blue color because they considered his character design to be racist in the same vein as Jynx from Pokemon IE blackface.
Looking back, it’s almost like they wanted him to look like Genie from Aladdin.
DBZKai did incredibly well in the ratings, beating out both Yu-Gi-Oh! ZEXAL and reruns of the original Yu-Gi-Oh!, only sitting behind Justice League Unlimited. Despite also airing on Nicktoons at the time, Toonzai airings of the show typically consistently beat out Nicktoon’s viewership of the show, and each block claimed it was their highest-rated show. This was a good move for 4Kids, but a little bit too little too late.
They had hoped there would be some sunshine peeking through the clouds with their next big project – a general audience anime streaming site called Toonzaki.
4Kids launched Toonzaki, on September 15, 2010 after being bombarded with a demand for uncut and subbed content. Toonzaki was a means of granting fans their wishes. Despite some uncut and subbed content already being made available on their Youtube channel, and a few DVD releases, there was a decent-ish amount of hype surrounding the launch.
Believe or not, Toonzaki had many more titles than just 4Kids stuff – several of which were actually aimed towards a more mature audience, such as Fullmetal Alchemist, Trigun, Murder Princess, Descendants of Darkness and Gunslinger Girl. Being clear, they did not own the licenses to any of these titles – they just made streaming agreements with other websites.
I saw numerous comments regarding this praising 4Kids for moving in the right direction, and I agree with that, but I also saw just as many if not more state it was, again, too little too late, and I agree with that too. Some even went so far as to call it “cheating”, since most of Toonzaki’s content was hosted on Hulu, Funimation or Crunchyroll (IE all titles except Yu-Gi-Oh! ones), meaning you didn’t necessarily have to watch most of these titles on Toonzaki. Basically, it felt like 4Kids wanted credit for what other people did, again, barring Yu-Gi-Oh! uncut.
The website had other issues in that, since many of their videos were Hulu embedded videos, no one outside of the US could watch many of their shows. In addition, Toonzaki had a lot of difficulties gaining traction. While having an anime aggregate site was a bit convenient, and some even stated the players from the various websites worked better on Toonzaki, for some reason, whatever hype there was died down quite quickly.
This post made on ANN’s forums to discuss Toonzaki before its premiere got zero comments.
Their Facebook page did okay. They were definitely active, but they barely managed to get into double digit likes on their posts most of the time, and they didn’t get that many comments. Remember, this was back in 2010-2011, back when Facebook was basically at its peak.
It’s Twitter account did way worse with only a few retweets on each tweet and, somehow, a grand total of two likes across their entire timeline, and zero comments.
I don’t know where they even advertised this site. The one print ad I found was for, I think, New York Comic Con….and that was it. No commercials whatsoever. No other print ads. No big announcements – hell, no official announcements period. Nothing.
4Kids was so lazy with this that their blog wasn’t even their blog – it was a blog roll of posts from other websites, like Anime News Network and Anime Shinbun, and nearly all of the articles weren’t even about their anime or website.
When you search “Toonzaki” there’s only eight pages of results, and I’d say 75% of them are mostly unrelated.
There was another thing that I didn’t see brought up anywhere else, but it was bugging me, so, uh, here goes….that naming scheme is awful. The name itself is fine, but as Mark Kirk put it in that interview with ANN from 2010, “Toonzai will also have an online component, which is for the kids, and Toonzaki is essentially its older brother.” Toonzai is literally one letter off from Toonzaki. So any little kid who wants to watch the edited kidified version of 4Kids’ shows from Toonzai (which were hosted on 4Kids.tv) might stumble upon Toonzaki, which had stuff like Deadman Wonderland, Monster, and fucking FIST OF THE NORTH STAR. If you think I’m overreacting, I typoed both names into each other several times while writing this part of the article.
As far as I could tell through the Wayback Machine, there were no parental controls or age confirmation for any of these titles, so they were leaving themselves pretty open to complaints from parents. I know this website was for general audiences, and I know 4Kids kept their logo off it, but it was still a 4Kids product. They should have put this under 4Sight and adopted a more different name. I don’t know how they would have worked the branding or advertising, but it doesn’t work the way they had it set up.
To drive that point even further, they eventually added games to the website….Not saying adults don’t play games, I do all the time, but why would you feel the best addition to your general audience anime streaming site that’s supposedly not, in any way, aimed towards kids would be a bunch of Flash games? It’s not only that they added games to the site – the games they had were completely random games that had absolutely nothing to do with anime. It was ridiculously out of place.
Being completely fair, though, Crunchyroll also had a games section for several years at this point, but many of their games were anime-related, and the section also doubled as general discussion of all PC and console games. In fact, the discussion seemed to take up much more space in that section than the mini-games did. Plus, they never catered to a child audience, so it’s not quite as weird or questionable.
Considering Crunchyroll was legal at this point, and other anime companies such as Funimation and Viz were also streaming anime online, there just wasn’t much of a point to Toonzaki except to watch uncut Yu-Gi-Oh! titles, which had already been made available previously on their Youtube channel, for a time anyway.
After 4Kids went bankrupt, Konami/4K Media got the rights to Toonzaki in the property auction. According to this blog post from a user named Ravegrl, the site was quickly neglected after that and experienced a lot of issues such as broken videos, links and images. The biggest issue came on August 2012 when 4K Media took down all Yu-Gi-Oh! videos to transfer them to another server. For some reason, that transfer caused the entire service to be down for three months. The last update was on April 2013.
On July 24, 2014, Toonzaki shut down for good, again with no announcement, with its URL redirecting to Yugioh.com. Apparently, Konami just wanted to focus on putting the Yu-Gi-Oh! episodes on their own website and had no desire to be an aggregate site for other anime, so Toonzaki was booted.
The Facebook page was sporadically kept alive long after Toonzaki shut its doors purely to promote Yu-Gi-Oh! episodes on Yugioh.com, which kinda feels like putting a neon billboard on a corpse. Konami stopped doing this in 2016, however, leaving Toonzaki to finally rest in peace after living such a brief and uneventful life.
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