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Bandai America's Tamagotchi virtual pets were a hit in Japan-and it wasn't difficult to understand why.

In a country where living space is at a premium, word of mouth is highly effective and competition didn't exist yet, so Tamagotchi was a sure thing.

"One of the things that worked to our benefit [in the U.S.] was there was tremendous word-of-mouth coming out of Japan," says Brian Goldner, 35, exec VP-sales and marketing for Bandai since August 1997.

Prior to that, Mr. Goldner led the brand's marketing efforts from the agency side at J. Walter Thompson Entertainment, Los Angeles, as worldwide director and a member of Bandai's executive committee.

"The buzz for the product was already evident as early as the Toy Fair" in 1997, he says.

Tamagotchi-a virtual pet from outer space who comes to Earth in an egg-was officially launched in May at FAO Schwarz in New York and San Francisco and quickly rolled national. Print, radio and mobile outdoor boards supported the introduction via JWT.

Advertising efforts on behalf of Tamagotchi focused on telling the story of the character, says Mr. Goldner.

"Fundamentally, we were jumping into a market that had immediate competition from Playmates Nanopets and Tiger Gigapets-in Japan it was the one and only. We used a different marketing approach to focus on the unique shape and characteristics-that the Tamagotchi was a virtual pet that came from outer space versus a dog or cat," says Mr. Goldner.

Mr. Goldner says he knew by late June that retail demand would far exceed Bandai's capacity. To meet the U.S. craving, Bandai Chairman Makoto Yamashina authorized product intended for other parts of the world to be distributed here.

"We rearranged the whole world to satisfy the demand of this country," says Mr. Goldner.

Within seven months, the toy earned $150 million in retail sales.

"By the end of the year, we had sold around 10 million Tamagotchis in the U.S. alone. You could never have predicted the kind of demand we had," says Mr. Goldner. "For Tamagotchi to be a hit, we would imagine it to be in the neighborhood of 2 to 3 million pieces-which would have put it at almost a $50 million brand at retail."

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