Jakks Pacific Inc. (JAKK) recently inked a licensing agreement with Microsoft Corp. (MSFT) to design and manufacture interactive plush toys beginning with King Cheetah and Maltese Tiger that integrate with the ‘Kinectimals’ video game for Kinect for Xbox 360 entertainment system that was launched worldwide this month. Jakks Pacific has a partnership with Kinect games to manufacture the interactive toy range, which falls under the pre-school category.
In addition, Jakks will produce a mainline plush assortment to be available at retail counters in the U.S. starting in spring 2011. The first slot is slated to feature five plush animals.
Jakks limited collector’s edition of Kinectimals plush toys will deploy the Microsoft Tag technology, allowing players to scan the tag on their toys and watch the King Cheetah or Maltese Tiger appear in the game.
We expect the company to benefit from this new initiative in 2011. Additionally, many of the company’s launches in 2010 and early 2011 look much better than products of previous years.
The company’s range of new toys and electronics provide solid momentum to its 2010 holiday season. Toys “R” Us recently listed its Disney Princess & Me 18-inch dolls as one of the Top 15 best new toys of the holiday season.
Jakks Pacific currently retains the Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.
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