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Friday, June 22, 2001
2001 Small Business profiles

Interactive setting its sights high

By Sharon Pian Chan
Seattle Times technology reporter

Greg Gilbert / The Seattle Times
Phillip Tavel, in the center with glasses, is co-founder of Interactive Imagination. He's displaying a couple of uncut card sheets. Surrounding him are card illustrators, from left, Tim Gillette, Chana Goodman, Rich Werner, Tavel, Dan Tibbles, Tom Cook and Matt Holmberg.

In the world of trading-card games, Wizards of the Coast is the 800-pound gorilla with "Magic: The Gathering" and "Pokémon" cards. Last year, a mousy start-up opened up in Pioneer Square--Interactive Imagination, maker of the game "Magi-Nation."

After launching in October, "Magi-Nation" hit the No. 3 position behind "Magic" and "Pokémon" during the holidays, and the company plans to start selling it at Target in the next few months. Interactive Imagination has its sights set on more than the cards; it aspires to become a brand, a swoosh, a license-able property that will rival the Pokémon phenomenon.

"It's made to be between `Magic,' which is darker, older, for the over-16 crowd, and Pokémon, which is cute and fuzzy," said co-founder and creative director Phillip Tavel, who puts the target audience between the ages of 8 and 14.

The fantasy game revolves around a magical race called the Eliwan and the colonization of a moon that orbits their home world. Players start with three Magi characters and their energy tokens to summon spells and creatures to battle their opponent's Magi.

It remains to be seen how much headway the cards can make compared with Pokémon, which has had $4.3 billion in licensed retail sales outside Asia. Although entertainment properties such as Pokémon have been turned into a successful card game and Harry Potter is making similar push this year, none has started out as a card game.

The game is the brainchild of Tavel, a former high-school physics teacher turned lawyer, and Greg Richardson, the former head of product localization at Nintendo of America in Redmond.

Tavel landed at Nintendo as a product specialist after law school, and the two left the company in November 1999 to put together a business plan. From the beginning, visions of Pokémon, which started as a Nintendo video game, danced in their heads, and the two were set on creating an entertainment empire.

"Magi-Nation is about creating a brand so we can go seek out partners and make plush toys, video games, an animated series," said Tavel. The list goes on, he says--miniature collectibles, action figures, board games, apparel, a movie. With that goal in mind, every step has been as deliberate as a summit expedition on Mount Rainier.

"During the quality-assurance process, if it couldn't be a Halloween costume, throw it out; if it couldn't be a plush toy, throw it out; if it couldn't be a pillow case, throw it out," said Chief Executive Rich Silveira.

Tavel and Richardson moved into an office space in Pioneer Square last January while fellow co-founders Don Morris and Sterling Griffin raised $2 million in funding from angel investors.

They recruited a seasoned group of executives, including Silveira, former president of video-game publisher Squaresoft; Glenn Halseth, former director of games for Hollywood Video and sales director at video-game publisher Namco and Squaresoft; and Jack Tse, who used to head up the international business division for Wizards of the Coast. The staff now numbers 25.

The company slowly leaked the game out into the market last October, first at independent distributors, then to niche retail chains such as Babbages and Electronics Boutique.

"These are hard-core gamers and you don't want to alienate them," Silveira says. "When you go mass market too quick, they perceive it as selling them out."

In March, the company launched a game for Game Boy Color, which sold about 100,000 copies.

Last month it released an expansion pack. And in the next six to eight weeks, the cards are expected to go on the mass market at Target stores.

The game is already selling in Electronics Boutique stores in Australia and in Blockbuster and Toys R Us in Canada. The company is also translating the cards into Chinese.

The game started out on solid footing, selling 12 million packs in the first six weeks. The company says it is profitable, although it's attempting to raise $4 million for marketing and international expansion. Most recently, it's been pitching an animated series to the television networks.

"It seems like Magi-Nation has a good game that people love," said Bill Rose, vice president of research and development at Wizards of the Coast in Renton. "Does it have enough fun for an audience to play it a year later?"

Joyce Greenholdt, editor of collectible-card magazine Scrye, agrees that it's a good game. "But there haven't been any big successes of things that started out as a trading-card game exploding in other media," she said. "On the other hand, trading-card games have only been around for seven or eight years so there's still time for that to happen."

At Babbages, sales after the holiday season dropped off sharply and the chain has decided not to carry the expansion pack.

At Electronics Boutique, on the other hand, sales remain "solid" in third place, according to Jerry Madaio, vice president of marketing, and Greenholdt says the game remains in the top-10 list.

"I'm not too concerned about it," said Silveira. "The whole card business is driven by expansion packs; we've only released the initial launch. Until we really decide to go full-fledged mass market, it's not that big of a deal. We just gotta build on the underground and then we'll have the mass market coming to us."


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