Layoffs Hit Online Game And Toy-Maker Smith & Tinker


Guess it’s a bit harder to launch the next Webkinz than the backers of web-based toy-maker Smith & Tinker thought. The company raised $29 million from VCs including Foundry Group, DCM and Alsop Louie Partners, and debuted its Nanovor online game in August. The accompanying toys, called Nanoscopes, started retailing for about $50 in October. But now comes news that the company has laid off about 15 employees — or roughly 30 percent of its staff.

In a statement to VentureBeat, Smith & Tinker said it had “staffed aggressively” in advance of the Nanovor launch, but that the layoffs were needed to get the company back to a “healthy operational size” for 2010. The company didn’t confirm the exact number of jobs lost.

Kids can play the Nanovor game without buying the toys, but the Nanoscopes let them continue to battle their creatures while offline. Smith & Tinker also sought to keep the cash flowing by offering a virtual currency that kids could use to buy upgrades for their creatures, complete with pre-paid game cards.

The Nanovor launch got high-profile coverage from the likes of the WSJ, and the toys have already garnered praise and awards from within the toy industry. But judging from the layoffs — which come in the midst of what should be prime toy-buying season — it seems that the buzz hasn’t yet translated into a sales windfall.

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