Mind Candy CEO Michael Acton Smith says that toy companies have embraced virtual worlds with what he calls "great gusto." Smith was at the 2008 Worlds in Motion Summit to discuss the ways physical products can interact with virtual worlds.
It was Smith's first time, he said, demonstrating his company's Moshi Monsters virtual world outside the UK. The Moshi Monsters world consists of cute, cartoonish monster pets that have a corresponding real-world component: a cell phone strap creature that lights up when the phone rings.
Though Webkinz still has a ways to go to match the popularity of Beanie Babies, it's well on its way, Smith said, noting that it did $20 million in its first two years. "So why, as a game designer, should we care? Why should we bother thinking beyond the screen?" Smith posited. One reason is that toy tie-ins are not only an additional revenue source, but they allow for a deeper connection with the users.
Mind Candy set up a few years ago with a focus on social games, beginning with the ARG Perplex City. Moshi Monsters is the company's second product: "Imagine Tamagotchi mixed with Facebook, and a little bit of Big Brain Academy
Smith said he'd been interested in the virtual pet space for years, intrigued by the progression of phenomena like the pet rock, tamagotchi, Neopets and Furby. But the timing seemed to be right for Moshi Monsters since the evolution of Flash technology and broadband.
With Moshi Monsters, Smith aimed to create a lot of social tools, and a responsive pet that evolves depending on user behavior. In particular, though, he stressed the educational element: "Kids will be learning in a stealth way," Smith said, pointing out educational and vocabulary-building games and puzzles that are part of the Moshi Monsters world.
Moshi Monsters uses a business model similar to Club Penguin, with a tiered subscription model and a free mode. Though the cell phone accessories are currently the only merchandising extension, Smith says he plans on plush toys, coloring books and other points of access for users.
Ultimately, Smith says, the online products of the future can rely heavily on these kinds of merchandise extension models to offer deeper levels of engagement to their users through tie-in toys, activity books and clothing.