The August 2009 Webkinz! And a taste of what’s next…

The new August 2009 Webkinz have arrived! Silversoft Cat (above), Lionfish, Iguana and Mocha Pup are the most recent plush pals to join the collection and they’re all as soft and adorable as you’d expect from what has been one of the most successful toy trends since Beanie Babies.

But of course, that begs the question: what’s next? Well, the folks at Smith & Tinker hope the answer is something called Nanovor. Paidcontent.org has the story…

Seattle-based gaming company Smith & Tinker is hoping that it can turn a combination of an online battle game and related electronic toys into a franchise that’s just as lucrative as Webkinz (which is bringing in a reported $750 million per year, per SAI).

The Seattle-based company recently launched Nanovor, a free online game that lets kids battle fantasy creatures—also called Nanovors—but the WSJ reports that it will start selling the toys, which retail for about $50, in stores this October. And the revenue stream doesn’t stop there; kids will also be able to build up their creature army with add-on packs they can buy with virtual currency called Nanocash.

Smith & Tinker’s comprehensive business model has helped it raise $29 million in funding since its launch in 2007. Its most recent cash infusion (amount undisclosed) came in July; investors included original backer Alsop Louie Partners, as well as DCM, Foundry Group, Leo Capital Holdings and Paul Allen’s Vulcan Capital. The company will promote Nanovor with TV ads and a web series.

The hybrid online/offline game strategy has worked well for Ganz (parent company of Webkinz), but also for Nintendo, which by most accounts, has raked in well over $15 billion for its Pokemon franchise since 1996. Meanwhile, Disney (NYSE: DIS) paid $350 million for a slice of the business when it bought out Club Penguin in 2007.

That’s not to say that Smith & Tinker’s Nanovor franchise is guaranteed to be a success. Ganz faced fallout when it tried to up the Webkinz revenue stream by running ads in its virtual world, and Disney’s Club Penguin deal hasn’t proven to be as lucrative as the media company forecasted. Smith & Tinker will also have to overcome the challenge of getting parents to shell out $50 for (another) electronic toy in the midst of a recession.

The Dirty Dealings behind Webkinz World

Webkinz World

Confessions of a Webkinz Dealer:

We started selling Webkinz (from Ganz) before their products were popular (just before Christmas of 2006). We started out small and was able to place larger orders as their plush toy became more popular (we ordered over 1,000 Christmas Reindeer). We pre-sold over 700 Reindeers off our website and then sold another few hundred from our two retail stores. Those were pretty good numbers for a specific single item.

There were problems with late and missing shipments but we stuck with them. We promoted their products and recommended them to our customers. We even ordered their non-Webkinz products so we could maintain a certain status level to continue buying their webkinz. They demanded that we sign a contract (which basically protects them from legal actions) to continue carrying their products. Suddenly without any real reason, we didn’t get any shipments after signing the contract. We asked our sales rep and never got an clear answer. Finally we got a call from a sales manager stating that our account was closed because we violated their policy of wholesaling their products. We don’t wholesale (if we did, we could have easily sold several thousands more).

We were a bonafide retail operation that helped promote and build their product. Since we were a highly tech company, our employees had their own online webkinz to show kids/parents how to use the website in our store. We ran webkinz computer workshops in our retail store to help kids play safely online. We usually included webkinz tips on our newsletter that we handed to our walk-in customers. Ganz customer service was quite bad and we stepped in to help our customers whenever we could. We replaced codes and talked them through certain parts of the website. We really stood behind their product and endorsed it.

Once they terminated our account, we continued to buy their products through the backdoor. Ganz was selling skids of new webkinz to a person who claimed to be a non-profit charity. This person then sold these webkinz at a healthy profit to other stores and dealers. This was done under the knowledge of the employees and management at Ganz. It is ironic….they incorrectly (or deliberately) cancelled our direct account because of wholesale violations and then they sell skids to a so-called charity that wholesales it back to us. Oh…we could feel the dagger deep in our back!

We have stopped promoting this product. We still sell a few to satisfy our customers and once this product is dead, we will not shed a tear. Their web traffic has declined by half since peaking last Christmas, normally we are sad when a good product is declining….but not this time.

I think they had an excellent product but they failed to treat their specialty stores fairly. They also did not provide adequate customer service to the end consumer. They made all that money and was not able to address any of their problems (instead they spent their profits on lawyers and bullying).

We have been in business for 16 years and never dealt with any toy company worse than Ganz. People talk, whether they are employees of Ganz or retail stores that experienced first-hand abuse….there is much more dirty details that we will not mention here.

The toy business is not always about fun and good things…..it can get dirty and greedy. Ganz is a good example of it.

More interesting readings on Ganz:

U.S. Retailers sue Ganz: http://www.playthings.com/article/CA6577499.html http://www.heraldnews.com/business/x1346895091/Freetown-business-suing-Webkinz-maker

Webkinz Annoys Parents, Trashes Brand: http://www.alleyinsider.com/2007/12/greedy-webkins-infuriates-parents-bombards-kids-with-ads.html

Attorney General’s Suit Against Ganz for Lead Jewelry: http://www.wcax.com/Global/story.asp?S=7488447

October 2008 Webkinz Releases from Ganz

Ganz Webkinz pets are plush toys that come with a unique Secret Code that lets you enter Webkinz World and play with a virtual version of your pet online.  Do I have a Webkinz of my own…..the answer is a big YES.  I got a horse and named him….Thunderhoof.

October 2008 release.

– Buffalo
– Clownfish
– Pink and White Dog
– Porcupine

Lil Kinz
– Hummingbird
– Triggerfish

October Webkinz Releases from Ganz

October Webkinz Releases from Ganz