His company's Webkinz has inspired a whole new type of toy: the plush creature kids hold dear with the added value of access to a virtual world where they can interact and buy goodies for their virtual creatures. Over the past year, the competition has taken note: Mattel has launched BarbieGirls.com, Ty launched Beanie Babies 2.0, Bratz has Be-Bratz.com and Build-A-Bear has Build-A-Bearville, just to name a few.
But Webkinz got an early start -- and that's crucial for online communities. And that is nowhere more evident than in Webkinz sales for the 2007 holiday season. Ganz, the privately held company that produces Webkinz, doesn't report sales figures, but stores such as Limited Too, which stocked the toys for the first time this past holiday season, cited the products as top sellers. Webkinz recently began selling more ancillary accessories and launched some seasonal offerings: a reindeer and penguin.
Website traffic also tells the story. Traffic to Webkinz.com jumped about 20% during the holiday season, according to Compete. Traffic is down slightly from its December high but still boasts about 6.4 million unique visitors a month, according to the service, enough to double Club Penguin and 50% more than Neopets. Recently, Silicon Alley Insider valued the Webkinz world at $2 billion, based partly on Walt Disney Co.'s Club Penguin buy for $750 million.
The company relies on word-of-mouth advertising. A search for Webkinz-related blogs on Technorati turns up 967 blogs about the product.
It was around Easter 2007 that the brand really started to take off, says Anita Frazier, industry analyst for NPD Group, and early scarcity issues were alleviated by the holiday season. She calls the tried-and-true plush toys tied to a rich virtual environment "magical. ... We've found most kids are actively playing both the online version ... and with the physical toy. If either one didn't work on its own, I don't think the combination would be as magical."
While Ganz doesn't talk much about its success or ruminate on why and how it's become so popular, a spokeswoman did say the most recent holiday season owes much of its success to higher awareness of the product. Susan McVeigh, director of communications, touts the benefit of Webkinz being a "safe purchase" for parents. "It was a comfortable choice."