game called Perplex City. Effectively a real-life treasure hunt, it captured a modest
but passionate audience. Nevertheless,
Acton Smith realized its potential was
limited. In 2007, he laid off all but a few
employees and started up Moshi Monsters.
A year later, the company was in a
bind. Mind Candy was rapidly running
out of cash, and the financial crisis made
investors skittish. Acton Smith desperately
appealed to a London hedge-fund contact.
“Look, I don’t get it,” the guy responded,
“but my kids are playing Moshi nonstop.
So I’ll give you a couple hundred thousand
pounds, and we’ll see what happens.”
Four years later, they’re enjoying the
view. Moshimonsters.com has more than
50 million registered users globally, with
one-third in the U.S., and has grown into
a full-fledged social network. Users can
interact as they navigate their pets
through a virtual land, friending one an-
other and sharing tips on how to boost
their monsters’ health and happiness
meters. More than half a billion messages
have been sent to date.
Though the site is free to use, a small
percentage of subscribers pay 5 pounds
($6) monthly for a passport that enables
monsters to access exclusive areas on the
site. It’s enough to have earned the com-
pany a $200 million valuation—and, more
important, recognition as a bankable
“Look, I don’t get
it,” says a Mind
“but my kids are
prompting Disney to respond with Club
Penguin Magazine. The newest Mind Candy
offering is Moshi TV, a web-video hub intended to serve as an age-appropriate
You Tube. A beta version of the site went
up in late December.
“One of the great things about having
a digital heart for your intellectual properties,” Acton Smith says, “is that it’s
easier to evolve them with changing
fashions.” In the past, entertainment
companies had to invest heavily to introduce new characters on high-profile
platforms such as TV or film, then wait
and see if there was enough traction for
retail extensions. The feedback to roster
additions on Moshimonsters.com is immediate, and Mind Candy is nimble
enough to capitalize on clear fan favorites.
If the company moves slowly in any
way, it’s with regard to acquisition. Club
Penguin was once a startup, but sold out
when the getting was good. Acton Smith
is taking a longer view. “There are some
eye-popping numbers that we could sell
the business for, but the world needs
more entrepreneurs who are willing to
keep their chips on the table,” he says.
“I’d love to have a multibillion-dollar business that transforms what it is to be an
entertainment company. I know, it’s ambitious.” Sure, but so is inviting a pop
star to a party via Twitter.
WHATEVER HAPPENED TO . . . TAMAGO TCHI?
Co-inventor Aki Maita
tests the prototype
with high-school girls
from the Tokyo district
of Shibuya. Results
The first generation of
Tamagotchi is released
in Japan. Scarce availability would lead Japanese consumers to pay
upwards of $1,000 in
Tamagotchi flies off
American toy shelves.
The national frenzy
would die out almost
as quickly as it arose,
attempts such as a
game for Game Boy.