May 28, 2004


Neopets popping up in real world


By Chris Marlowe
Youth entertainment company Neopets Inc. is moving off the Internet and into the physical world. The free online community, which is supported by integrated product placement, is poised to capitalize on its intellectual property of cute, imaginary creatures.

Next year, Sony Computer Entertainment America is scheduled to release "Neopets: The Darkest Faerie" for PlayStation 2 and Sony's imminent PSP handheld device. Mobile content is in the planning stages.


Neopets chairman and CEO Doug Dohring said he is considering a movie next. "Our view is that if we do a Pixar-quality film with Neopets -- and we're in no rush to do that because we're already highly profitable -- we believe that will provide the right positioning and umbrella as to who we really are and what our content is like," he said.

The foundation stone of the Neopets community is its dozens of virtual pets. Similar to the Tamogachi craze of the mid-'90s, each of the Web site's 22 million members has a customizable virtual pet (pictured) that needs to be cared for. The creatures need such basics as food and water, but they also can be pampered and played with.

To earn purchasing power, members play branded games, view movie trailers and engage in other activities sponsored by the likes of 20th Century Fox, 4Kids Entertainment, Atari, Discovery Kids Channel, the Walt Disney Co., DreamWorks, MGM, New Line Cinema, Paramount Pictures, RCA Records, Turner Broadcasting, Universal Studios and Warner Bros. Many other household brands sponsor activities, too.

Dohring said the idea is to keep the site free in a creative way, without pop-ups or banners. Each activity is created especially for the sponsor, he said. "We try to create a context for what the product is," Dohring said. "It's all self-selecting -- we never compel anyone to do anything, so it has to be high quality."

For Disney, Neopets created the Disney Theater on a highly trafficked section of Neopia (as the virtual world is known). The long-term agreement promotes four properties at any one time, refreshed with new movie, DVD and other releases. Visitors can play themed games in the "lobby" or enter to watch trailers on the "screen," and they can click through to Disney's own site if they wish.

Neopets' campaigns are usually supported by pre- and postcampaign survey research and 24/7 tracking. These numbers are confidential, but Dohring said a current movie-related activity had 1.2 million unique game plays, and 50,000 people clicked through to the official Web site in the first week it was up.

Members also help create Neopia. Among other things, then can write for the weekly newspaper, submit artwork to the Neopets Art Gallery, set up bank accounts, invest in the "NEODAQ" stock market and communicate using the site's internal e-mail system and message boards. Some even establish their own stores, where they stock items won or collected from elsewhere on the site.

In the real world, McDonald's is about to offer 109 different Neopets toys as the free premium with its Happy Meals. Existing merchandise includes plush toys, Hasbro's Pocket Neopets, Thinkway Toys' voice-activated toys, Wizards of the Coast's Neopets Trading Card Game and stationery items.

Dohring said 39% of Neopets members are under 13 years old (but old enough to be fluent readers), 40% are 13-17, and 21% are 18 and older. They skew 57% female. According to Dohring, Neopets gets more than 60,000 new registrations every day.

Nielsen//NetRatings reports that the average time spent per person on Neopets is greater than any other site on the Internet, including eBay, MSN, Yahoo! and America Online. Additionally, the site generates more than 3 billion page views per month.

The privately held Neopets was officially incorporated in April 2000 and was profitable within three months, according to Dohring. Last year, Neopets.com became available in Japanese, both main variants of Chinese, Korean, Spanish, German, French and Italian.