BusinessMahlon

Soon-Shiong Forms Toy Venture with Jakks ‎

BusinessMahlon

JAKKS Pacific and NantWorks Partner to Produce Next Generation Interactive Toys New venture, DreamPlay™ Toys, will use state of the art image recognition technologies to revolutionize toy and consumer products

LOS ANGELES & MALIBU, Calif.--(BUSINESS WIRE)--Jul. 17, 2012-- Leading toy manufacturer JAKKS Pacific, Inc. (Nasdaq:JAKK) and technology leader NantWorks, LLC, founded by Dr. Patrick Soon-Shiong, announced that they have signed a letter of intent to create a joint venture to develop, market and sell next generation toys incorporating NantWorks’ proprietary image recognition technology. The new venture will be named “DreamPlay Toys.”

“We are witnessing a major transformation in the play patterns of children,” said Stephen Berman, President and CEO of JAKKS Pacific. “More and more they are turning to smart phones and similar devices as their major source of fun and play. JAKKS, through its partnership with Dr. Soon-Shiong and NantWorks, has made the commitment to become a leading toy consumer products technology company that will take recognition technologies and interactivity in products and play to new heights.”

“The most interesting things happen when experts from different industries come together to rethink their worlds,” said Dr. Soon-Shiong. “This is what we are doing with DreamPlay. Toy experts and technology experts are combining to create a whole new world of possibilities for children, and indeed for consumers generally.”

JAKKS Pacific will begin transforming its product line to incorporate the new image recognition technology, and will present the first examples at the International Toy Fair in LA in October. Children will be able to “activate” toys, and interact with them using smart phones or tablet devices, in their homes and in stores. The NantWorks platform enables instant connections between physical toys, video, posters, books, games and all other forms of media.

“Children will be able to bring toys to life,” said Dr. Soon-Shiong. “The only limit will be the child’s imagination, and we all know there is no limit to that.”

“In my over twenty year career in the toy industry, I have never seen anything as transformative, ground-breaking or exciting as this partnership with NantWorks and what it will mean to our business in the future,” added Mr. Berman. “And what begins now with toys will eventually extend to many kinds of consumer products soon after.”

Under the terms of the letter of intent, NantWorks will link JAKKS’ toy products to content and animation on mobile devices through the image recognition platform, and JAKKS will have the exclusive right to arrange for partnerships with other toy companies to make the platform available to them in the development, sale and marketing of their toy products. JAKKS and NantWorks will have a profit sharing arrangement for these third party toy relationships. Under the proposed arrangements, JAKKS Pacific will be providing resources, including personnel and facilities and the services of its CEO. Mr. Berman will also serve as General Manager of DreamPlay Consumer Products, which will extend image recognition technology to non toy consumer products and applications. The parties intend to complete definitive agreements within the next 90 days.