JAKKS Deals In

JAKKS Pacific (Nasdaq: JAKK  ) is crossing its corporate fingers, hoping that the holiday season will be kind to its portfolio of products -- indeed, shoppers are packing the malls right now, scouring storefronts for the best deals. That doesn't mean, however, that the company can't look ahead to next year.

In the spirit of looking forward, JAKKS has announced a licensing arrangement with the people who brought the world Deal or No Deal, as well as the ultra-sickening Fear Factor (people really will do anything for money, huh?). JAKKS will bring the game show 1 vs. 100 to its Plug It In & Play TV Games platform. For those not familiar, these toys are essentially joystick controllers with a few arcade games in them; for instance, one could buy a stick loaded with emulations of old favorites such as Pac-Man and Galaxian.

1 vs. 100, which can be seen on General Electric's NBC network, poses an interesting sociological question: Can the individual be smarter than the crowd? Rick Munarriz already covered the philosophical implications of the game show as they relate to investing. Let me say that I think JAKKS has made the right move by forging a relationship with the brand. While Deal or No Deal may simply be a case of playing the odds, 1 vs. 100 is more competitive and knowledge-based, since one contestant is pitted against a large group of antagonists who all want to beat him or her in a game of trivia. I think gamers tend to enjoy software that makes use of either their retention of factual minutiae or their intellectual quotients -- witness the popularity of Nintendo DS titles such as Brain Age.

JAKKS is pretty savvy at licensing and distributing toy and craft products for the mass market, and it has kept itself afloat even among competition from giants like Hasbro (NYSE: HAS  ) and Mattel (NYSE: MAT  ) . The plug-in games have been around for awhile and may have lost some of their novelty value -- especially since there are so many on the market these days -- but they are still a fun proposition. The company seems to be keeping them going, although a check of the latest 10-Q shows that the product line was an offsetting element in terms of North American toy sales. Hopefully people will still be interested in the 1 vs. 100 concept when it arrives in retail channels sometime next spring.

As for the stock, JAKKS still remains reasonably valued, although there are some risks associated with litigation related to a joint venture it has with THQ (Nasdaq: THQI  ) to produce games based on World Wrestling Entertainment's (NYSE: WWE  ) intellectual properties -- I mentioned this in a take on JAKKS' last earnings report. Hopefully the joint venture can work everything out with WWE, because video games based on the biggest wrestling brand around should continue to be valuable.

Hasbro and Mattel are certainly more famous when it comes to toys, but JAKKS Pacific intends to get its fair share of the holiday spoils during the next few weeks with its various TV games, arts-and-crafts items, and action figures. The company's new wrestling game is out now, and it will definitely move a fair amount of units on both the PlayStation 2 and the next-generation Xbox 360 console. Considering the valuation, the stock is worth a look for investors interested in toy makers.

Plug in and play some related Takes:

Hasbro is a Motley Fool Stock Advisor recommendation, while Mattel is an Inside Value pick. You can try any of our newsletters free for 30 days.

Fool contributor Steven Mallas owns shares of General Electric. As of this writing, he was ranked 1,031 out of 14,235 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.


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