PowerCore founder: Toy-to-life games are about to take off in China

3 min read

Toy-to-life games, a category that creates immersive gaming experiences by connecting digital gameplay and physical toys, has become very popular in the west. Activision, the game maker that injected vigor into the genre with its Skylanders franchise, sold over US$ 3 billion worth of games and toys worldwide by 2015.

However, the category has yet to become a big thing in China. But it won’t take long before toy-to-life craze hit the middle kingdom, according to Shen Jia, founder of PowerCore, the Tokyo and East Palo Alto-based startup that aspires to bring its technologies here.

Founded in 2013, PowerCore creates and distributes collectible smart toys that can be scanned into games via NFC or QR codes for a reactive gameplay experience. In addition, the startup also handles digital activations and provides merchandise solutions to gaming companies and brands.

PowerCore

Stumbling blocks

“People always tend to think toy-to-life more about one franchise and a console-type of gaming experience. A couple of problems that was specific in China,” Shen Jia says. “One was that consoles don’t exist here, the other is the console that’s being able to get collection things might be a little big difficult for people to store it in their houses.”

To counter these obstacles, PowerCore’s solution is focused entirely on mobile, in line with China’s shift to mobility. “The toy-to-life sector as far as mobile concern doesn’t really exist right now, even in US and Japan.”

The best form of toy-to-life games, according to Shen, is something like Pokemon Go, where there’s more real life interaction with digital experience. “As a game structure, it incentivizes people to leave the house and do interesting and weird things,” he says. “We have games that help you interact with the environment, with the products you purchase as well as the place you go, that’s what we think the future toy-to-life sector would be like.”

Feeling like a VIP

There’s always something lost in translating the hot IPs from one medium to the other, even if they do, there’s another barrier to overcome, the loss of audiences who share passions for that content.

Shen, who is a big fan of Transformers, cites a personal experience to illustrate this point: “Before what happens is each of the licensed individual properties is doing the marketing themselves,” he says. “If a Transformer film is publishing, there would be movie trailers and the game itself would be promoted by advertisements, and the toys will be in the store by their own advertisement. None of them would work together.”

Through cooperation with IP right holders or movie studios, PowerCore’s platform does allow them to tie that all together by cross-referencing contents that share the same IP. Those who watched a certain movie can use their tickets to unlock cool characters in the game, or if you play the game to a certain level, you can get a discount when buying a movie ticket.

“We create a platform where people like a specific movie franchise to interact on all the different levels,” he adds. “When all of the IP properties work together, as a fan I feel more like a VIP: when I go to the game I have a benefit.”

“If you think from a movie studio and IP point of view before they wouldn’t know the LTV (lifetime value) of a real user. They only know the game LTV, but they didn’t know that the same person that plays this game also bought movie tickets and also bought this toy,” Shen Jia says. “Now we kind of measure that specific LTV of a user at multiple touch points.”

China, Japan, and the US

Shen is also the co-founder of RockYou, which created widgets and apps for MySpace and Facebook. As a serial entrepreneur with experience in the US, Japan, and China, he compared with startup ecosystems in the three countries.

Silicon Valley and Beijing are no doubt the top-level startup hubs with top-notch resources in terms of funding, overall talent pool and innovation speed. The difference between the two cities, according to Shen, lies in how exits work.

“That process is still a little mixed in China. The whole system is changing and everyone in China adapts to the changes a lot faster, so most of the companies look at business models a little bit short term, as opposed to the shoot-for-the-moon type of thing like Facebook and Snapchat,” he says. “Those types of startups are having a harder time starting in China, but in general, the innovation speed in China is ridiculously fast now.”

Japan is still pretty slow as far as startup innovation, Shen thinks this is in part because the culture of being safe still prevails in the country. “Despite the government is very supportive of the tech startup, no nobody is willing to try things that are really adventurous because if you have a failed startup they think you suck, which is kind of nuts.”