Watch out, Disney, Fantage doubles its growth for kids virtual world

Virtual worlds for kids have been volatile during the recession. Some have come and gone. Some have declined. So it’s worth noting that Fantage, a virtual world for kids who like playing games and staging fashion shows, has doubled its audience in the past year.

The Fort Lee, N.J.-based company now has 3.3 million unique visitors a month, compared to 1.5 million nearly a year ago. To date, it has had 7.7 million registered users, compared to 3 million a year ago. That’s pretty good growth at a time when the competition for the attention of kids is growing.

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David Hwang and Peter Bae, founders of the Flash-based site, say the growth has come because they have been constantly refining the site, adding virtual pets this summer as well as a virtual currency so that users can buy virtual items. The virtual pets start out as eggs that can hatch into 25 kinds of pets, which you then use to play games.

Fantage competes against such sites as Disney’s Club Penguin. “Disney used to be a hundred times bigger than us, but we’re growing faster,” Hwang said in an interview. “This is a dynamic market, where small players have a chance.”

For sure, the market is crowded. Rivals abound, such as Moshi Monsters, Dizzywood, Neopets, SuperSecret, Free Realms, Gala.net, Gaia Online, SecretBuilders, and Dinokids.

The Fantage site is accessible because it doesn’t require users to download anything. (Kid-focused game site Smith & Tinker recently found out the hard way that kids in particular are not allowed to download programs onto their parents computers.) That means, however, that Fantage has to keep its graphics fairly simple. The site is free-to-play, and users can buy a monthly subscription for $5.99. The site targets users ages six to 14.

As with many sites, you can customize your avatar, or virtual character, by changing its hair, clothes, skin tone, eyes, accessories and hover boards. Users can also collect goods for their homes and customize their furniture. Kids can play a variety of mini games, where they can earn more virtual currency. And they can chat with friends in a safe environment. They can stage events such as fashion shows or parties.

The company has 34 employees. Bae and co-founder Hwang were steeped in Korean online games. From their experience in that market, they learned the virtue of patience and experimentation. They started their company in January, 2007. This was Hwang’s third startup and Bae’s second. They hired some contract programmers and decided to build a site focused on online education.

First, they tried an online math web site. It went nowhere. Next, they decided to build a virtual world with built-in games for young kids. After a few months, they showed it to a focus groups of kids, who hated it. Bae and Hwang tossed it all out. Then they created what would become Fantage, (short for Fantastic Age) a fantasy world modeled after Disney’s Club Penguin.

As a web-connected virtual world, Fantage is a place where kids can create cartoon-like avatars and dress them up, chat with friends, and play simple games. The art is based on cute Japanese anime style, but with distinctly American twists. The characters have big heads, big eyes, and small bodies. They can make three gestures: wink, wave, and cry. And they can glide around on an air board. It’s a lot like the imagery in Gaia Online.

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They launched the free beta site in April, 2008. The site was built on Adobe Flash, with no download required. They created all sorts of clothing and accessories for the kids to choose from. By May, the site had grown to 30,000 – 40,000 users, about 70 percent of whom are girls. They started a premium membership that cost $5.99 a month. There are no ads, since parents don’t like advertisers selling stuff to their children.

They signed up Nexon, the South Korean online game publisher that has made huge hits such as Maplestory, as a strategic partner. Nexon made a minority investment in Fantage and signed the rights to become the publisher of the site in Europe and Japan. The company’s goal is to hit 10 million registered users by the end of this year.