4Kids Entertainment told analysts in conference call Wed. that it...

that Nintendo has been difficult in terms of some of [the pricing and margin] issues and that’s something we have to continue to work at” before product launches. N.Y.-based 4Kids said in May that it planned to ship GBA-TV cartridges in 4th quarter containing cartoons that can be played on Nintendo’s Game Boy Advance (GBA) and front-lit GBA SP handheld systems in same manner as videogame cartridges. It said special proprietary technology developed by 4Kids Technology subsidiary “enables the Game Boy Advance to function as a personal video player with the Game Boy controls allowing the viewer to Pause, Resume, Stop, Rewind and Chapter Search each of the television episodes on the GBA-TV cartridge” without any need to buy separate adapter. Company said in May that it expected cartridges “to retail for under $20” with each cartridge featuring 2 cartoon episodes from TV shows such as Pok?mon, Kirby: Right Back At Ya! and Yu-Gi- Oh!” Nintendo appeared to be enthusiastic about GBA-TV at that time with Nintendo of America Exec. Vp Peter MacDougall saying “4Kids Entertainment has developed a new and valuable dimension to Game Boy Advance with the launch of GBA-TV. Now kids can watch their favorite cartoons and play their favorite Game Boy videogames anywhere, anytime.” 4Kids said Wed. that they still expected to ship first GBA-TV cartridges in 4th quarter. When asked by analyst if 4Kids was planning to distribute GBA-TV cartridges on its own, 4Kids said “we're looking at that now.” It said that “from a marketing standpoint, everybody think it’s fabulous” product. But problem with product, it said, is there is “margin issue” and cartridges must be sold at price lower than average game. Cost would determine if there was enough money involved for 3rd-party company to distribute cartridges. It said there will probably initially be some sort of 3rd-party distributor involved “but nothing has been” set in stone. It said there was “potentially significant reward” with product that outweighed “modest risk” involved with it. 4Kids said it was hoping Nintendo realizes it “can’t keep on squeezing us one level when we're actually performing a service to them.” Noting that upcoming PSP handheld game system from Sony slated to ship next year will be able to play video beyond just games, 4Kids said “we're giving Nintendo an opportunity to make their player a full entertainment device.” Comment wasn’t available from NOA by our deadline. 4Kids also indicated that it planned to provide video content for PSP. Company also told analysts that it made bid on bankrupt 3DO’s Cubix assets (CED Aug 12 p7) so it could tap another game publisher to make game based on property. 4Kids had licensed property to 3DO to make games based on it to begin with and still owns intellectual property rights for it, 4Kids said. On video front, 3Kids said Yu-Gi-Oh! was doing well and it hoped to grow video revenue growth going forward with addition of Teenage Mutant Ninja Turtles videos this year. Comments came as 4Kids said its revenue for 2nd quarter ended June 30 soared 185% to $23.4 million from $8.2 million in same quarter year ago as it reported profit of $3.6 million (26? per diluted share) vs. $1.2 million (9?) year ago.