To the average ten-year-old, Michael Acton Smith is the most famous man they’ve never heard of. He is the brains behind Moshi Monsters, the internet phenomenon that began as a quick sketch in a coffee shop and now engrosses more than half the nation’s 6 to 12-year-olds. To the uninitiated, Moshi Monsters is a kind of Facebook-meets-electronic pets website where children adopt virtual pet monsters and leave messages for each other. But while Facebook nurses a decline in users in the UK and US, Moshi is busy signing up one new user every second. There are now 50 million of them in the UK, Australia, New Zealand (where one in two children play) and America, which is fast catching up; that’s more than four times as many users as Club Penguin, Disney’s social network for children which has 12 million members.
Moshi is also an unstoppable merchandising juggernaut: the trading cards, the furry toys, the books and the magazine, which was unleashed on an eager public earlier this year. Even Acton Smith’s team is a bit taken aback by Moshi’s reach: when they opened a pop-up shop in West London, 2,000 excited children and their bemused parents turned up on the opening day, some having made a four-hour journey for the privilege of meeting “Mr Moshi” and buying a small furry monster.
“The response has been extraordinary,” admits Acton Smith, the artfully rumpled 36-year-old British entrepreneur whose company was heading towards bankruptcy in 2008 when he dreamed up the Moshi brand. “Sales of the trading cards have grown week on week, the toys have been a sell-out and and the magazine is the bestselling kids’ title.”
To play Moshi, children choose one of six virtual pet monsters, name them and design their room. Then they’re free to explore Monstro City, playing games and puzzles to earn “rox” to buy virtual food and furniture. There are plenty of jokes with a nod and a wink to parents: the furniture store is Yukea and the blog is the Daily Growl (“All the ooze that’s fit to print”).
Players can leave messages, swap Moshi gifts, read stories and share artwork. There’s an ever-expanding number of tongue-in-cheek characters who appear in the magazine, the blog and the new viral music videos: the rapper 49 Pence and singers Broccoli Spears and Dustbin Beaver.
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There’s also a reassuringly educational element: the daily challenge, which is your main source of rox, features maths and logic puzzles, flags of the world and even spelling. “The idea of education by stealth is important,” says Acton Smith, whose own monster is a white Furi called Snowcrash. “I was originally going to call it Puzzle Monsters, but I realised it was too much like school.”
The game has a clever “freemium” business model: it’s free to play, although for £5 a month you can become a member, which gives you access to all areas (including the sought-after underground disco). Exact numbers of members are a closely guarded secret, although Acton Smith says it’s a single-digit percentage. Mind you, even 2 per cent of 50 million users would yield a healthy annual income of £60 million.
Industry experts believe Moshi Monsters is so successful because it masterfully combines children’s major preoccupations: nurturing, collecting, gaming, chatting and sharing with friends. This is no accident. When Acton Smith first had the idea he spent months researching what made children tick (he doesn’t have his own yet, although he says they’re definitely part of the long-term plan).
“When I was setting up Moshi I read everything I could, from Pokémon to Beanie Babies, just trying to get into the mindset of children, which I’ve woven into Moshi. Every single day I try to draw inspiration wherever I can: seeing as many relevant movies as possible and wandering around Hamleys trying to fill my brain with as much as possible.”
It was back in 2005 when he sketched out his monster idea, a fat penguin called Chico (who sadly never made it to the final six). At the time, he had secured £6 million in venture capital funding to develop his Big Idea: an ambitious online treasure game called Perplex City. But it never took off, and by 2007 his company, Mind Candy, was on the brink.
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“We were burning through the cash so I said to the board, this isn’t working and I’ve got this crazy idea about kids using the internet — why not give it a go? It was stressful because I had lost £6 million of their money, but they were supportive.”
The about-turn was duly executed, and he spent 2007 researching and designing the site. It was launched in 2008, but growth was unspectacular until 2009, when he realised that children wanted to communicate with their friends online, just as their older siblings did on Facebook. “Once we added those tools in, that’s when it started going crazy.” He passionately defends the social networking side of the site, which he sees as training wheels for today’s digital generation. All messages are filtered for swear words and possible phone numbers and there’s no private messaging. “This is the world they’re growing up in and we have two choices: we can either prevent them from going online or allow them to in a smart way where there is very sophisticated software to keep them safe.”
The company now employs 60 people and is in the process of hiring 25 more; an office opened in New York two weeks ago. Despite recently taking over one floor of an old tea warehouse in Shoreditch, East London, they’ve already run out of space and are to spread on to the floor below.
The Manhattan loft-style office is everything you would expect from an internet start-up: huge Monstro City murals, an oversized purple Chesterfield sofa, a long wooden café-style table with chairs salvaged from an old church and a sign propped up on the central coffee bar that reads: “Work Hard and Be Nice to People”.
Acton Smith was always destined to be an entrepreneur: as a child in Marlow, Buckinghamshire, he would put on BMX shows in his front garden and try to charge people to watch. As a keen ZX Spectrum user, he launched a computer game magazine at the age of 11 that he handwrote and got his dad, a librarian, to photocopy.
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After university in Birmingham, he decided to set up an online business selling gadgets with a friend. His mother lent him £1,000 to get started in return for a stake in the business. That turned out to be a canny move by Mrs Acton Smith: the business was firebox.com, which last year reported sales of £13 million. “I never imagined myself building a kids’ entertainment site, but I’m having the time of my life,” he says.
He’s had approaches from big players to sell up but isn’t yet tempted. “My vision is to build the biggest entertainment brand in the world for this new digital generation.” He compares what Mind Candy is doing online with what Disney did with animation, and what Pixar has done with film. “The next platform to entertain kids is the internet — to connect, communicate and share with their friends. We’re still scratching the surface of what’s possible.”