We’re pleased as punch to have been featured in The Wall Street Journal. The article leads in with reference to our successful second round capital raise and then provides analysis of where we’re at, where we came from and where we’re going. It’s a positive review of Bubble Gum Interactive and highlights many of the unique differentiators we have put in place to create the worlds #1 virtual universe for kids. This includes our development of an original, compelling IP, technological leaps against older virtual worlds, best-in-class focus on safety and community and appealing to a global audience via our launch of multiple languages and preparations to adapt to evolving technology platforms.

The article was originally published on The Wall Street Journal on 25th June 2012.

Below is the article in full:


Little Space Heroes Completes Second Raising

By Gillian Tan, The Wall Street Journal, 25th June 2012

Little Space Heroes has big ambitions – and fresh support from investors.

Children’s entertainment developer Bubble Gum Interactive has raised 2.5 million Australian dollars (US$2.5 million) to fund further sales and development of Little Space Heroes, the virtual universe home to characters such as Ace, Sparky and the dastardly Lord Shadowbot.

Little Space Heroes — developed by two former Walt Disney executives and launched in December 2011 — is played in more than 80 countries.

A key participant in the raising, which took just eight weeks, was Farmville co-creator Sizhao Yang who was also co-founder of MyMiniLife, which was acquired by Zynga. Others include Sydney Angels’ Sidecar Fund, Melbourne’s Starfish Ventures, Tokyo’s IT-Farm Corporation and Silicon Valley investor Bill Tai whose other personal investments include Twitter-owned Tweetdeck and mobile-to-mobile video chat application Tango.me.

Existing investors include Sydney’s Elevation Capital, Melbourne’s Artesian Capital Management, Singapore’s Toharu Ventures and India’s Angaros Management while Bubble Gum Interactive has also received grants from Government bodies such as Screen Australia and Commercialization Australia.

Little Space Heroes is now live in eight languages: French, Spanish, Portuguese, German, Dutch, Italian, Indonesian and English. Languages to be rolled out in coming months include Japanese, Polish and Mandarin.

“No single country accounts for more than 20% of our traffic, and our biggest markets are the U.S., Canada, U.K., Australia, Philippines, Brazil, Middle East and India,” Bubblegum’s marketing and community director Paul Gray told Deal Journal Australia.

“On average we have one kid signing up every 10 seconds and the core age group of the kids is between 8 and 10 though we get users aged between 6 and 16,” he added.

Former marketing manager at Walt Disney Internet Group, Mr. Gray teamed up with former Disney Interactive Media Group online producer Phil Mason, Bubblegum’s chief executive, who came up with the idea for the game as a comic book concept over a decade ago.

“Ten years later I finally decided to fold storytelling experience into the virtual world. The fact the universe is based on a core story experience differentiates us from the likes of tier 1 virtual worlds like Club Penguin and Moshi,” Mr. Mason explained.

Disney bought Club Penguin in a US$700 million transaction in 2007 while U.K’s Mind Candy owns Moshi Monsters.

Little Space Heroes is on pace to deliver faster subscriber growth than both with an expected 4 million users by the end of 2012, its first full year.

“We’re expecting around 25 million in year two and most tier 1 worlds reach million free-play users in the first year, 20 million in the second year and up to 50 million in the third year,” he said.

Little Space Heroes is a gaming universe large enough to cater to individual preferences and children can do anything from caring for pets, partaking in space battles, collecting items, decorating houses or even taking on roles within various societies.

“We see some kids who want to be tour guides or waiters to help people, essentially doing anything which makes them popular while others have taken to our rock band stage as musicians and the bands’ managers,” Mr. Gray explains.

“It’s interesting watching the change in interaction and imagination as kids age, essentially they are creating and developing their own identities,” Mr. Mason added.

Individual games are buried within the broader universe, for example band members partake in a game similar to Tapulous’ Tap Tap Revenge or Sony PlayStation’s Guitar Hero. The game is also fully moderated and parents are able to select a chat function which includes only common game-related phrases which are translated according to each user.

Though the game is mostly played on desktop computers, Bubble Gum Interactive acknowledges the use of tablets — such as those made by Samsung and Apple — by schools in developed countries is on the rise.

“Tablet penetration will be massive but given the reality that our average kid is still using a desktop, our focus is to develop mobile games and animated cartoons so instead of Angry Birds, our users will be able to play Little Space Heroes games which link to the virtual world,” Mr. Gray explained.

The cartoons will be used to lure networks like Disney, Nickelodeon or DreamWorks Animation to consider acquiring the business in time.

“Boys aged between 5 and 8 is one of the hardest market segments for these players to crack plus a potential cartoon series would be attached to a virtual community split 50-50 between users of both genders,” Mr. Mason said.

Bubble Gum Interactive hopes to create a franchise experience which develops characters and their stories into merchandise.

“We want to give kids the opportunity to invest in the brand and the stronger the story, the more compelling the experience,” said Mr. Mason, adding the group is also engaging with parents by attending conferences like the one held by “mommy blogger” website BlogHer, which reaches around 40 million women a month.

The group reckons it will introduce itself to North American venture capital firms in the second half of this year with a view to raising a third round of capital in the next 12 months.



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