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PowerCore: The Toys-To-Life Startup Picking Up Where Disney Fell Short

The gaming market has swelled to become a $100 billion business globally, with the vast majority of market revenue generated through social platforms and mobile apps. In just 90 days, Pokémon Go amassed a record-breaking $600 million dollars, spending months atop the list of highest-grossing apps for both iOS and Android. The addictive social phenomenon saw historic success by seamlessly blending physical and virtual experiences, using an adventurous interactive competition to bring a beloved fantasy franchise to life.

Millions flooded city streets, weaved through traffic, rushed into storefronts and clashed against complete strangers – all to catch imaginary characters that randomly appear on devices amidst everyday situations. This evolving ecosystem of virtual reality, social media, mobile gaming and smart hardware is what defines the toys-to-life industry.

Recognizing an opportunity to capitalize on this growing market, major media players like Disney and Activision heavily invested into the space. While Activision was first to break ground with the launch of Skylanders in 2011, Disney Infinity was shut down back in May, delivering a crushing blow to the market. The company claimed their toys-to-life project struggled to hit a stride, causing a decline in earnings across other business categories. Disney watched global revenue drop 2% to $1.2B, further taking an 8% dip in operating income, falling to $357 million. With more massive media and gaming companies backing out of the industry, one disruptive startup remains standing with a clear vision for reviving and redefining the space.

 PowerCore creates and distributes smart toys that connect the online and offline worlds, developing reactive software programmed into hardware that integrates augmented and virtual reality into physical gaming experiences. PowerCore also handles digital activations and provides merchandise solutions to gaming companies and brands, adding an interactive layer to in-app purchases. Founded in 2013 by serial entrepreneur Jia Shen, PowerCore raised $2 million in Series A funding. Prior to PowerCore, Shen served as Co-Founder of RockYou, a dominant social-gaming company that allowed users to create widgets to publish images or slideshows to their webpages.

RockYou swiftly scaled to deliver more than 100 million widgets daily, with Shen’s staff surpassing 200 people. Expanding beyond Myspace, RockYou became the largest ad network on Facebook, tripling in traffic week over week, which led to the company being showcased at their first F8 conference. RockYou has since acquired over 400 million users and generated over $140 million in funding.

I spoke with Jia Shen about the vision behind his company, merging the real-world with virtual reality, and what lies ahead for the toys-to-life industry.

 

What void or opportunity did you recognize that inspired the idea to launch PowerCore?

Jia Chen: Strong stories have dominated the toy and gaming industries forever. Huge global franchises like Transformers and He-Man began as Toys and television shows. Modern franchises like Pokemon, Yokai Watch, and soon Skylanders bridge all three mediums. For generations to come, this type of interaction is second-nature. We wanted to create a platform that really enabled this instead of mirroring the walled-off ecosystems we’ve seen in the past. 

What does the groundbreaking success of social games like PokemonGo! say about the market for connected gaming and the future of the Toys to Life industry?

Jia Chen: It’s the power of the narative; the vast appeal of stories like Pokemon, that’s what makes Toys-to-Life so compelling. It brings the fantasy world of Pokemon and the feeling of being a Pokemon trainer into real life. These games seamlessly integrate into your everyday interactions, becoming a natural way you experience the people and world around you. This is what Toys-to-Life and interactive gaming is all about. It’s about adding to and participating with the story through multiple mediums.

Facebook recently unveiled custom VR Avatars, while Google’s Cardboard camera is now available in the app store — how seamlessly will these experience blend into the everyday lifestyles of people everywhere?

Jia Chen: This only becomes a stronger part of people’s daily lives when virtual reality and augmented reality hardware becomes ubiquitous. There are so many incredible apps still left to be established, but we’ll find out what they are shortly with many more disruptive and cutting edge experiences coming. The lowest common denominator will drive this adoption. Things like six degrees of freedom and resolution will be trumped by accessibility and availability.

How will the Toys to Life industry merge with the rapidly changing social media landscape?

Jia Chen: Experiences like Pokemon Go showcase how things blend into real life and ultimately blend into social life. Even simple AR experiences like Snapchat are dominating the way we are digitally connecting, communicating and interacting with each other. Toys and social games interacting with real-life objects is already growing with iBeacon and other location-based functionality.

Most games capitalize on in-app purchase or new feature updates — What do you see as the future of optimization and in-game advertising?

Jia Chen: Free-to-Play is here to stay, but it can no longer be as heavy handed as it used to be, or as controlled as it is in China. Users are more savvy, choosing where to spend their time and money. Like every other gaming platform, production quality is increasing which always drastically impacts business models and how the market functions.

How will this technology and emerging industry impact the way toys are designed and produced?

Jia Chen: As toys become internet-enabled, regulations and privacy policies around data collection will need to evolve.  Conventional manufacturing processes are already changing to scalably and cost-effectively create toys that are personalized and uniquely designed based on the data associated to them.

How seamless will the worlds of gaming, digital marketing and entertainment intersect going forward?

Jia Chen: In the coming year, the release of movies and television shows already have coordinated launches of interactivity with games and merchandise. You’re starting to see some of this with toy and game tie-ins such as with the new ‘Angry Birds’ movie, Happy Meals, and their game. Data will travel between each of these mediums and allow for better experiences tailored to the viewer and the gamer.

 

Original article appeared in Forbes