Toy Story

Tech is transforming play. The latest in our Growth Stories series charts the rise of a company that uses augmented reality to bring toys to life.
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GAMING tech agency Draw & Code is a poacher turning gamekeeper.

With a background in turning out immersive digital content for clients including Hyundai, Red Bull and Peel Ports, the business is gearing up for the launch of its own product, the Kickstarter-funded augmented reality toy SwapBots.

The Bots are created from intricately-patterned plastic cubes, tracked via a phone or tablet, so the character in your hands comes to life in augmented reality (AR) on screen. They grow wings, legions of arms and legs; spin, twirl and fire things.

“The shadows and reflections are real because it’s based on the physical object in front of you,” says marketing manager Phil Charnock. “It’s like the character’s escaped from the screen.”

A boy experiencing SwapBots' augmented reality with a tablet computer

With a goal of £25,000, SwapBots squeaked past its target to raise £25,617 from 383 backers. This autumn will see nine characters released. But, by allowing users to mix and match components, the nine swell to 729 different combinations.

“We’d wanted our own product for a while,” says Charnock, saying it was the culmination of years of experimentation.

Liverpool-based Draw & Code was launched in 2010 by four “like-minded folk who shared a passion and spied an opportunity”, he says. “We’d all worked on innovative client projects together and the time came for us to work on our style of agency that used technology creatively.

“We moved on to thinking about the R&D and product-development side. Each year we created a new product to push ourselves and explore the technology. SwapBots was one of these internal experiments, but this time we saw a business case in it.”

VR is used extensively across industries including architecture, construction, training and healthcare and manufacturing. Jaguar Land Rover’s Evoque was designed in a cave virtual reality system – where projectors are trained onto the walls of a room, creating a realistic virtual environment – saving the carmaker £8m in vehicle development costs.

The question for Draw & Code – now a 16-strong team – says Charnock, is: “How can we use this new technology in ways that find a new audience and new use for it?”

A plate of fish and chips
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We are already, he insists, more familiar than we think with AR. “Mobile makes it super-accessible – 97% of all US kids have access to a phone or tablet; around 91% in the UK.

“Augmented reality has been culturally accessible since Roger Rabbit. Look at the captions on the news; on the sport – head-up displays in aircraft. They’re the original augmented reality. We’re often asked if augmented reality will ever be big, but it already is. There are more than 200 million regular users of Snapchat – it’s neck and neck with Twitter, as it doesn’t have bot accounts – and that uses augmented reality. Pokemon Go has 500 million users in the English language alone.”

Gatorade’s Super Bowl advert didn’t appear on TV this year; its SnapChat filter drove 160 million impressions – more than the 115 million people who tuned in to the game.

SwapBots toys

SwapBots emerged from a visit to AWE, the first augmented reality trade event.

“We came away wondering why we were the only ones presenting something fun,” says Charnock. “But play and gimmicks are essential to the success of technology. When AR restarted a few years ago it took itself so damn seriously.

“Toys popularise technology; Talking Barbie emerged around the same time as Amazon’s Alexa. Would Alexa have been as popular without Barbie first? The technology behind IBM’s Watson software was first used in the home as a toy dinosaur; Meccano was the original tech toy.

“We know tech,” he says, “but we’ve had to see how the games business works.” The move from B2B to B2C is not to be underestimated.

Marketing – especially to children – has changed dramatically. Charnock says: “TV is marginally the biggest advertising medium for kids; YouTube is neck-and-neck, and ahead in some territories. Not long ago we’d be talking about TV ads and SEO, but now it’s micro-influencer marketplaces. Traditional advertising takes a back seat to social.”

Justin Dooley, at Caffe Cream of New Brighton
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SwapBots’ commercial journey began as part of the HAX Boost accelerator – the world’s first hardware accelerator, focusing on early growth-stage companies. Part of the D&C team decamped to San Francisco, and the benefits – in both cash and connections – are clear, with angel investors backing SwapBots. “It helps,” smiles Charnock, “if you can show there’s a VC fund giving you some support. And one in Silicon Valley sounds pretty good.”

D&C has also been supported by the UK Games Fund and Tech North – turnover has doubled in the last year.

“We beat the gold-rush for agencies to try AR and VR,” Charnock says. “We were established with this technology. Other agencies are only just adapting to it now. We’re inundated with requests from clients about immersive tech. We no longer have to explain AR and VR to them – they know what they are and have ideas on how to use them.”

SwapBots will land this autumn: “First with crowdfunders, then – through the accelerator – we’re working with Amazon Launchpad, which gives us a featured spot on the front page. We seem to have hit on the right technology, in the right space, at the right time.”

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Produced by the 2018 International Business Festival, in partnership with Wordscapes.