Activision proved there was a market for small, real-world items interacting with a virtual environment with its toy-based video game Skylanders. Now a French technology company is hoping to expand on that idea. ePawn is demonstrating a new technology -- called the Arena -- at this week's Las Vegas-based Consumer Electronics Show, which it hopes to ship to retail by this holiday. And it's something of a doozy. At its core, the Arena is a 26-inch screen that can interact with specialized items players put on it. These can range from RPG figurines to air hockey paddles. The screen itself is simply a board -- a place for the gameplay to take place. Sitting under the LCD topping, though, is a tracking layer that reads the chips in the game pieces. The software driving the game comes from an iPhone or iPad. If that sounds somewhat like a cousin of Activision's holiday hit to you, that's music to the company's ears. "We love Skylanders because the game explained what we can do with installing tags in items," says Valentin Lefevre, general manager of ePawn. "We are the next step. ... Gamers are between ages 5 and 77 -- and Skylanders only targets ages 5-8." It's not the first time that a company has combined real-world toys with mobile devices -- Disney's Appmates did that last year on iPad. But the idea behind the Arena tech is to bring a board game sensibility to iOS titles. While the iPad screen is acceptable for two players, it's much too small for any more. But four friends could easily gather around a 26-inch screen, notes Lefevre. Object tracking is done in real time. Any movement of the items is sent via bluetooth and is tracked without any noticeable lag reflected in the gameplay. For instance, when you hit the puck in the air hockey game, it reacts appropriately to the force of your stroke. The two-year old company has already raised approximately €3 million ($4.6 million) and is speaking with Asian investors about its next round of financing. Lefevre and CEO Christophe Duteil attended CES to speak with television manufacturers about licensing the technology. As for game developers, those talks have been going on for a while. The company says it has already struck a partnership with French game maker Fun Forge to convert Inventorium over to the platform. And a "major publishing company" is evaluating the service, though they're unable to say who due to non-disclosure agreement restrictions. Additionally, the company is courting developers of existing apps, with an SDK that allows them to quickly convert their existing apps to the platform in a short period. "The idea is they don't have to change everything," says Lefevre. "They just have to spend a few hours." Though the Arena reads chips inside the peripherals, the device will not be a touch screen. Lefevre notes that while touch sensitivity would certainly have advantages, the cost of incorporating that technology for a device of this size would be prohibitive and almost certainly doom it to failure. As prices go down, it's something the company will look at, but not in the near term. Right now, by sticking to the chip identification method, ePawn hopes to keep the monitor's price in the $300 range. And while the emphasis will certainly be on gameplay, the monitor will have all the functionality of a standard LCD monitor, letting people use it as a display for their PCs or TVs -- and even using it as a big screen display for movies, etc. streaming from their iDevice. Ultimately, ePawn certainly intends to make a profit on the screen technology, but the long term bet is the same model Activision is betting on: Peripheral sales. To truly enjoy games on the Arena, you need to have the right items for the screen -- paddles for air hockey or the aforementioned figurines for the RPG game. And those, naturally, will be sold separately. "A big part of our business plan is to sell the tag[-based items]," says Lefevre. "We believe if people come to love this, they will happily buy [those]."