A Detailed Look Into the Konami/UDE Dispute

Almost everyone has heard the news about the Konami takeover of UDE. The rumors are broad. The facts are thin.

All we know is the following:

El Segundo, CA – (Dec. 11, 2008) – Konami Digital Entertainment, Inc. (KDE) today announced that the company is taking over all operational and business aspects of the worldwide phenomenon, Yu-Gi-Oh! TRADING CARD GAME™, effective immediately. KDE will take over distribution and customer support for the Yu-Gi-Oh! TRADING CARD GAME™ from Upper Deck Entertainment (Carlsbad), KDE's former exclusive distributor of the trading card game. The Yu-Gi-Oh! TRADING CARD GAME first took the Asian market by storm in 1996 and became a global sensation in 2002 as it reached the shores of North America, quickly followed by Europe and other territories. Today, the Yu-Gi-Oh! TRADING CARD GAME continues to reach new milestones as the game evolves.

“Konami Digital Entertainment, Inc. is very pleased that the Yu-Gi-Oh! TRADING CARD GAME continues to be the number one TCG in the world. We are fully committed to maintaining a very high level of game support, from sales to organized play, and to providing a seamless transition during this process,” commented Kazumi Kitaue, Chairman and CEO of Konami Digital Entertainment, Inc. “We look forward to having distribution of the Yu-Gi-Oh! TRADING CARD GAME within our corporate umbrella as it allows us to take advantage of the synergies from our existing gaming platforms to ensure continued great products for the Duelists and for our retail and distribution partners.”

For distributors and retailers wanting to set up accounts with KDE, please contact customer support at 310-220-8630 or card-po@konami.com.


<Now. What does this tell us? Not a lot. The only thing it tells us is that via media Konami is taking over the card game from UDE. The question is, why would they do such a thing?

There are many theories floating about. The first is that Konami wanted to make more money. However, if they were looking for an easier fall from the economic near-meltdown, why would the end the contract prematurely, knowing that in order to do so they would have to spend $75,000,000? And in addition to that, another rumor is that they'd try to lower costs of cards. If that were the case, then they would actually be -losing- money in the short run, and with the economy in a tailspin?

Another item on the agenda is that the creator of Yugioh didn't like the reprints of cards... the censorship of America, and he was getting upset that the cards in Japan looked much different than the ones coming to America. This is a valid reason, but Mr. Takashi hasn't said anywhere that he dislikes it.

A third theory is that Konami was selling the cards at reasonable prices in Japan, but UDE 'created' a bunch of cards to make cards more difficult to get. Rumor has it that Konami didn't like this... but that's all it is. A rumor.>

Enter the court case located here:

http://dockets.justia.com/docket/court-nvdce/case_no-2:2008cv01737/case_id-63327/

<Rumor has it the amount owed to UDE is $75,000,000... and they want an extra $1000 in penalties. However, remember, each day UDE is in operation of Yugioh, they are making a fair amount of money, meaning this counter lawsuit means little to them.

Another rumor is that Konami paid $75,000,000 and UDE just wants another $1000, but I'd doubt that's the case if UDE were suing for the $75,000,000.

After the court case was found, Konami attempted to ensure suppliers knew that they would be just as friendly with them as UDE once was... but stated they were reviewing every part of the TCG. Some of the rumors have included:
-Assimilation of the OCG and TCG
-Removal of North American UDE rankings
-Dismissal of all Yugioh Judges, Player Managers and Tournament Organizers (as far as Yugioh is concerned)
-Scrapping of the Hobby League

Of the four rumors above, there is only -one- that looks like it will actually be the truth, and that is the scrapping of the Hobby League. That is because our supplier has been talking to us about it. In addition, that announcement was not a very strategic move on Konami's part. Many people, upon reading that, figured the TCG might not remain separate... something that scared a great many and caused an influx on Japanese sales because the cards are so much cheaper.>

Recently several media have reported that Konami Digital Entertainment B.V. and/or Konami Marketing Inc. and/or Konami Digital Entertainment Inc. and/or its worldwide affiliates (hereinafter called: “Konami”) is/are taking over all operational and business aspects of the Yu-Gi-Oh!TM TRADING CARD GAME with immediate effect, based on an alleged termination of the distribution agreements with Upper Deck. According to this report Konami will also take over distribution and customer support for the Yu-Gi-Oh! TRADING CARD GAME

Upper Deck wishes to point out with great emphasis that the aforementioned reports are false, there is no legal ground or justification for this termination by Konami whatsoever and that this termination is therefore wrongful. Regarding the Yu-Gi-Oh! TM TRADING CARD GAME business Upper Deck is still the sole and exclusive distributor for the European territory and will continue providing the Yu-Gi-Oh!TM TRADING CARD GAME products to all its contractual customers. Upper Deck has already sent a warning letter to Konami demanding that Konami ceases the broadcasting of this misleading and unlawful information and to rectify accordingly forthwith. If Konami does not voluntarily comply with said warning, Upper Deck shall take all necessary legal actions forthwith.

Based on the foregoing, Upper Deck will continue to conduct business with all its counterparties as usual.

<Note that this has occurred -after- the lawsuit, not before.

Here's what UDE is -possibly- doing:
A) Stalling for time to get rid of goods and stop printing cards,
B) Noting that Konami might be taking over in America but is ascertaining its dominance in Europe, or
C) Just trying to keep suppliers guessing with regards to Yugioh.

If it were a threat, it would have been said -before- the lawsuit.

That's all that really can be said. It's not my duty to judge who is at fault, however I hope that brings a little bit of clarity into the situation.>

-Aster