Takara, Tomy Discuss Merger Plans

Representatives from Japanese toymakers and video game publishers Takara and Tomy have announced that the two companies are contemplating a merger. The news follows Konami’s recent sale of its 22.2 percent share in Takara – after the company continued to post disappointing results. Takara is best known as the maker of the Transformers line of robot toys, but also numbers game publisher Atlus, which has both U.S. and somewhat struggling Japanese divisions, among its group companies. Tomy has a wider range of toy products including homegrown properties such as Zoids and Micropets. Takara’s forays into video game publishing have been relatively minor, with Choro-Q (aka Penny Racers) and Battle Arena Toshinden being the most notable, and the company spun off its game properties into Atlus in January 2004. However, Tomy has had greater, albeit still limited success in the video games market, particularly with its license of the Naruto anime series (also the subject of video games by Bandai), and a number of Zoids titles for various platforms. With an aging population and the subsequent shrinking of the Japanese toy market, this is just the latest in a number of high profile Japanese mergers in and around the games industry, which have included Squaresoft and Enix, Sega and Sammy, and most recently Namco and Bandai. Although the Tomy/Takara merger is not yet finalized, according to Ryozo Kubo of Takara's corporate strategy division, "We are discussing integrating operations but the possibility of reaching an agreement is 50 percent. At this stage, no time schedule is set.” The Nikkei Keizai Shimbun newspaper has already suggested that the two companies could merge under a single holding company or through a stock swap as early as January 2006. The merger would create Japan's fourth-largest toy-game group with combined annual sales of ¥180 billion ($1.7bn).