Education-based Moshi Monsters preps beta launch

Serial UK entrepreneur Michael Smith took the wrapper off his new startup, Moshi Monsters at Virtual Worlds Forum today in London. The world goes into private beta in a couple of weeks.

Essentially, Moshi Monsters is Tamagotchi meets Facebook for 7-12 year olds, but with education thrown in. Your Moshi Monster is basically an educational tool in the shape of fully animated little monster. The monster lives on a far off world with lots of other monsters and reports back to you every day on what adventures he/she has been getting up to. Each day it sends you puzzles you have to solve and the better you do the more in-game credits you earn. But where Tamagotchi was just about feeding the pet, Moshi is about keeping your pet happy and well by learning stuff. There’ll be an in-game economy, casual games, forums, a social network, a room to decorate and lots of other elements. Moshi has also built a behavioral engine that tracks how well you’ve been looking after your pet and then develops its personality accordingly.

The business model is classic ‘Fremium’ with a basic service offered for free but primary revenues coming from premium products, not unlike Club Penguin which has 700,000 paying subscribers out of 12m registered users. Virtual worlds for kids are a really hot area at the moment – Neopets has had 40m pets adopted, and there have been 70m Tamagotchis sold to date.

Why is MoshiMonsters avoiding running advertising? The simple fact is that – certainly in the UK and I think globally – even as advertisers are being squeezed out of traditional broadcast channels by legislators worried about junk food advertising to kids etc, they are turning up online. But a child’s online experience can be controlled in a far greater way than TV. Parents are more likely to dig out their credit card for something they feel is safe and not abusing their kids with ads for burgers and soda drinks.

The company behind it all is Michael Smith’s Mindcandy, an online games developer which to date is best known for developing a reasonably successful Alternative Reality Game called Perplex City – which itself will be re-launched next year. Smith kicked off his career during the first boom with men’s e-tailer Firebox. Mind Candy has backing from Index Capital and Spark Ventures.