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In-Depth: Smith & Tinker's CEO On The Fall Of Nanovor, iOS Rebirth

Smith & Tinker CEO Joe Lawandus tells Gamasutra why the well-funded startup's toy/game hybrid Nanovor is no more, and explains about the company's journey to iOS games with Marvel: Kapow.
Seattle-headquartered interactive entertainment firm Smith & Tinker recently released Marvel: Kapow on iOS, the fruits of a licensing agreement it announced with Marvel last fall. But the company's long been known for its plans to explore the junction of toys and games, placing its energy for two years behind Nanovor, a toy-based game product with an online component. But the economics around such products proved challenging for the company, despite a total of $29 million in funding from notables like venture capital firm DCM, and it's since had to refocus. That includes a CEO in Joe Lawandus, formerly GM at Cranium and VP at Disney's toy division. The company's founder, veteran game designer Jordan Weisman, was also its original CEO; Weisman established FASA and created series like Shadowrun and MechWarrior. Lawandus says that as chairman of the board, Weisman remains very much involved in Smith & Tinker, as well as new projects. "It's been a crazy ride in a couple different directions," Lawandus tells Gamasutra. "You don't necessarily end up in the direction that you expected." Lawandus says that when the company was founded in 2007, "Our initial premise was the convergence of digital and analog play. With that premise, we thought it was most appropriate to develop our own IP as part of the paradigm shift in how kids play -- and that was Nanovor." According to Lawandus, Nanovor, which features a digital device that works with figurines to be trained, battled and brought to life in an online world, had high awareness and strong initial traction among its young target market early on. "Where it started to fall down a little bit for us was the business model. That style of game -- free to play, where you're constantly releasing new content -- is a pretty expensive game to manage, obviously. You've got to see a pretty significant uptake in order to be able to be able to profitably run a game that has that much content." And there was a significant marketing spend too, as Smith & Tinker -- placing Nanovor at major retailers like Target, Best Buy and Amazon -- placed heavy investment in advertisement, knowing that in the crowded online space awareness was crucial. "We ran a bunch of television advertising because we were in very competitive markets." Following Nanovor's 2009 holiday launch, the team was "cautiously optimistic," Lawandus explains. "We had pretty good traction at retail. There were certainly some things we thought we could do better in the online game to monetize and to retain users a little more effectively, and one of the challenges we were seeing was because it was a fairly heavy initial download." The solution would be to move in browser, which it tried with Nanovor: Evolution a "similar but derivative" experience that launched holiday last year. But it wasn't enough. "It got to the point where we had to take a few steps back, take a hard look at the business, look at where we were financially and how much cash we had from our initial raise, and we had to make a business dicision: At the end of the day, do we want to keep putting money into this?" "At that point, we had the Marvel license in hand, and as we were funneling a little more focus and energy into the Marvel title, we made a decision to shut down Nanovor." The company also saw a 30 percent staff reduction at the time it signed the licensing deal. Now aiming to refocus as solely an iOS developer, Smith & Tinker wants to stay lean at just under 10 full-time employees. Fortunately, some iOS talent had been hired in the process of exploring a mobile game for Nanovor, and these staffers can contribute much to the company's new direction. "We did our own handheld device initially, because Nintendo's handheld was pretty much it at the time," Lawandus says. And the DS platforms didn't enable the online persistence that Nanovor wanted. iOS "wasn't a factor in the kids' space" until the iPod Touch devices began gaining huge popularity among young audiences. At that point, "the iPod Touch started to get enough traction, and we were moving away from the proprietary handheld," he adds. "When we decided we couldn't move forward with Nanovor, we kept the iOS developer talent, and we kept some of the creative horsepower and marketing horsepower that we had. The scale of the market as an iOS-only developer is much different than a straight-up PC online game that's microtransactions-based, so we had to adjust the scale of the company as a strategic new direction." Shifting from one type of developer to another in such a big way "is never easy," Lawandus says. The company saw more than one staff reduction; one associated with exiting the physical Nanovor products, and another associated with the end of the PC game. although he asserts that the company did the best it could to ease its employees through a tough situation. The silver lining is that Smith & Tinker has that rare opportunity to begin again. "We're all huge Marvel fans -- one of the advantages of a restart with a licensed property is you've got a ton of built-in awareness, a ton of internal knowledge about the franchises and about the characters, and then you've got an aud around the world who also knows and loves the characters." "While the staffing piece was somewhat challenging because there aren't as many of us here, from a business standpoint, we feel like we've got a pretty good table set in front of us now." Marvel: Kapow released on June 8 to success, says Lawandus. "We've been very happy, with very limited marketing thus far," he says. "We've already blown past our budget. Ultimately the company aims for balance in the portfolio, not dependence on licensees. But in the near term, there are extensions planned for the title, success that even allows it to consider re-adding staff in the future. "The only thing is we're trying not to be just a straight-up mobile game developer... it's nice that we've got a license for starters, but the thing that we're trying to push forward, to be really different, is we are big believers in the value of brands," Lawandus says. "We're trying to carve out an intersection for hit casual games... the vast majority of megahits in iOS have been unlicensed, like Angry Birds and Fruit Ninja, and we're going to try to take brands into that space -- with a very casual approach [to the gameplay], yet we're doing it with a big brand like Marvel." Other platforms may be a possibility again in the future -- "right now, we're heads-down. We want to get a few titles out on iOS, get some wind in our sails, and we're looking to get some traction and then we can start to look at stuff like that again."

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