Moshi Monsters gadgets in the pipeline

It's been described as "Facebook for kids", has a sign-up rate of one person every second and features cute characters such as Squidge, Doris and Lady Goo Goo, but what exactly is Moshi Monsters and how did it get to be so big? He's a busy man, but Pocket-lint managed to track down Mr Moshi himself, CEO and founder of parent company Mind Candy, Michael Acton Smith, for a chinwag at his fancy new office in London's hipster central, Shoreditch.

When someone turns up to an interview carrying not one, but two cans of Red Bull in their hand you can be fairly sure that it's going to be an energetic chat and we weren't disappointed by Acton Smith's passion and enthusiasm for the Moshi Monsters brand.

"There are many different ways of describing Moshi Monsters. I've used the phrase 'Facebook for children' in the past. By that, we don't mean that we want kids to be uploading their party photos or talking about where they are. We wanted to create an online experience that allows them to do the things they want to do, all on one location.

"They can do puzzles, upload art, chat to their friends, send virtual gifts, in the way that adults can do all the things they love doing online in one space as well. However, where Moshi differs from many other social networks is that we don't allow any personally identifiable information and all users have a username, rather than using their actual name."

The online Moshi world has a wide-ranging audience, from parents to toddlers, but the core market is aged 7-10. Launched in 2008, Moshi Monsters is essentially a social network for children - an online world where they can adopt one of six different types of monster, including Zommers (zombie monsters), Luvlis (heart-shaped, flying critters) and Furis (gorilla-like creatures). These can then be customised and named (Acton Smith's own monster is called Snowcrash) and looked after, a little like a Tamagotchi. Players can also add pets or 'moshlings' to their monster's house choosing from characters such as Plinky, Ecto and Big Bad Bill.

There have been a number of scare stories in the tabloid press in the past, such as The Sun's 'Kids in peril on Moshi Monsters' that still leave many parents reaching for the panic button at the very thought of their sproglets taking part in any kind of online activity. But, is there really anything to worry about? Acton Smith is keen to point out that the safety of its young audience is of paramount importance to the company and something that a lot of time and money is invested in.

"We take privacy and safety very, very seriously. Firstly, we have an experienced moderation team who look over the site to make sure that everything's ok. Secondly, we have very sophisticated software, so if it spots anything unusual going on we can jump straight on it straight away. Thirdly, we also teach kids and educate them on how to behave online and how to look after each other and act properly in an internet community. Between the three of those, we believe we keep the site very safe. We all know that kids love the internet and they love technology. Far better that they're in a walled garden like Moshi Monsters than roaming the open web."

Mind Candy has certainly gained a significant amount of recognition for its accomplishments with the Moshi brand and recently won a Start-up 100 Award in the Virtual Worlds category, but how did it all get started? According to Mr Moshi, it's an idea that's been simmering for a long time.

"I used to read lots of weird and wonderful books as a child - my dad was a librarian and he'd bring lots of stuff home that really fired my imagination. I read lots of things like Dr Seuss, Maurice Sendak, Richard Scarry and JRR Tolkien and I used to create my own imaginary worlds. So it's all been bubbling away in my head. When we established Mind Candy, we raised a lot of money to create a game called Perplex City which didn't work out so well. Creatively it was amazing, but commercialy, not so good. Then our last attempt with the little bit of cash we had left was Moshi Monsters. which took off like crazy."

The Perplex City game that Acton Smith refers to was an alternate reality game concocted by Mind Candy which struggled to make money and was put on ice in 2007. Despite its lack of long-term commercial success, the game still has a loyal online fanbase but is unlikely to be resurrected, says Acton Smith, stating: "Never say never, but Moshi is so all-consuming that we probably won't be going back to Perplex City any time soon. I'm very proud of what we created, but it was just too niche".

Acton Smith first established himself as a bona fide internet entrepreneur back in 1999 when he and college chum Tom Boardman founded gadget retailer website, after inventing the Shot Glass Chess Set. Then, where Perplex City failed, Moshi Monsters triumphed and now has just under 40 million registered users. But, at what point did Team Mind Candy realise that Moshi was a runaway success?

"Gosh, great question", says Acton Smith. "Well, we built Moshi in 2007 and put it live in 2008 and you had to have a code - a pysical product - to get into the game. We literally only had a couple of sign-ups every day. Then we thought, let's not worry about making money in the short-term, let's just make it free. The day we made it free - 14 April 2008 [conincidentally, almost three years to the day of our interview] - we went from five signups a day to almost 5000. It was absolute pandemonium and we realised we had something special. And we've been holding on for dear life ever since."

The success of Moshi Monsters is global, with the US and UK representing the monster's share of the market (65 per cent), with the US taking about 35 per cent of registered users, while the UK has 30 per cent. Australia is the brand's third biggest market and Moshi has also made it to over 200 other countries around the world, so the customer base is pretty broad.

The idea of the brand being global certainly brings a smile to Acton Smith's face, particularly when he recounts a tale about a trend among Moshi users in Asia: "Something I heard the other day, which I loved, is that parents of children in Korea and China are signing their kids up to Moshi to teach them English, which is just amazing."

As well as being a heart-warming yarn, this also highlights the positive, educational aspects that a neatly executed online portal for kids can offer (as well as being a hell of a lot of fun). Disney obviously agrees, as its Club Penguin online world has gone from strength to strength since its launch in 2005, to become the market leader. So, is Mindy Candy gunning for Disney's crown?

"Club Penguin had been around for a few years longer than us. It's a great product and it's doing very well but we're gaining on them. Obviously catching up with them is one of the things that we'd like to do but ultimately this is more than just an online experience. We want to create a new type of global entertainment company for kids where the website is at the heart and there are all sorts of other products and experiences - everything from books and cartoons to theme parks, trading cards and toys".

Starting a children's entertainment company with the products spinning off from a website is a new concept. In the past, similar brands tend to have started as a TV show, film or game (just think about Star Wars and its exemplary history of merchandising and the recent Angry Birds phenomenon). Mind Candy sees the starting point of a website as being ideal as it has "a direct connection with the audience from the outset - creating an extraordinary opportunity".

Moshi Monsters has already got an impressive portfolio of branded products, including soft toys, Top Trumps cards and and a book deal with publisher Penguin, but isn't there a danger of over-exposure?

"We've done about a dozen licensing deals but we're not going too crazy - we've been offered hundreds. We want to make sure that every licensed product that we have adds value to the brand and that it isn't just about slapping a logo on there. We want to make sure that it's beautifully created and that the kids will love it and that it's true to the story, so we're taking it one step at a time".

The next product to join the Moshi Universe is Moshi TV - a free iPlayer-style online TV service. This is a reflection of TV viewing habits moving away from the conventional television and onto our computers. Both adults and children are increasingly using internet catch-up services to watch TV at a time that's convenient for them, so that they're not constrained by broadcasting schedules.

"Broadcast TV has been around for decades, but kids aren't so excited about sitting around on the sofa watching TV. They want to interact and share and we think there's a huge opportunity there.

"We know how much kids love video. YouTube is very popular with kids and they often use it for searching before Google so we thought why not create a TV platform within Moshi where kids can watch Moshi cartoons as well as cartoons created by other people as well? And the key is because it's online, we can wrap the social layer around it, so if kids see something that they like they can share it with their friends or comment. We think it's going to be revolutionary and pretty exciting".

The social networking aspect of watching TV is certainly growing, with more Facebook and Twitter capability now availble on many web-ready TVs and plans to include similar functions within the EPG. The tentative plan for Moshi TV is that it will be free for kids. It will run without ads, but third-party content owners will have to pay to have their videos on the site. Although Acton Smith remained tight-lipped over a launch date ("It'll launch some time this year, so watch this space"), he's confident that Moshi TV will eventually be viewed across different platforms such as on tablets and in internet-enabled TVs.

It's also likely that we'll be seeing some Moshi-branded gadgets emerging once Moshi TV is in place: "Kids love technology, they love iPads and digital cameras, so we plan to create some moshified consumer electronics. Not just yet, but it's definitely something that we'd like to do".

With an office packed with Apple Macs, we weren't too suprised to learn that Acton Smith is a huge fan of the Cupertino brand and unsurprisingly whipped out an iPhone 4 when we questioned him on his preferred smartphone apps. "I think the Spotify app is fantastic. And I love Hipstamatic - that's probably my favourite."

The brand already has an iPhone app itself - Moshi Monsters MouthOff - that enables kids to hold the iPhone in front of their mouths, speak into the microphone, and have their speech animated by their chosen monsters's mouth on the screen. We would expect to see more app-related fun from Mind Candy in future, particularly if Moshi TV takes off - an iPad app would seem like the logical next step.

"At Mind Candy, the initial plan was to create multiple products - that was the idea from the start. But Moshi has just taken off so fast and there's so much that we want to do with it that we think its would be a mistake to spread ourselves too thin. We've got a few new games that we're developing, but they're spin-offs from the core Moshi idea".

So, Mind Candy wouldn't consider creating a similar social network for adults? "I don't think so. Facebook does that pretty well so I think to create a successful social network, given the dominance of Facebook, would be a huge task." And with that, the Red Bull is all gone and our caffeine-fueled chat with Mr Moshi is at an end.

Do you (or your kids) use Moshi Monsters or Club Penguin? Are you looking forward to the launch of Moshi TV?