Activision 
proved there was a market for small, real-world items interacting with a virtual environment with its toy-based video game Skylanders. Now a French technology company is hoping to expand on that idea.
ePawn is demonstrating a new technology — called the Arena — at this week’s Las Vegas-based Consumer Electronics Show, which it hopes to ship to retail by this holiday. And it’s something of a doozy.
[Activision Publishing CEO 
Eric Hirshberg talks with Gamasutra about bringing new life to the Spyro series with Skylanders, and how the company’s toy-based approach with the game could pay off big.]
Over the course of its history, the Spyro the Dragon series has sold more than 20 million software units. But like any 13-year old franchise, it was getting a little long in the tooth – and had long since lost any qualities of a cutting-edge video game.
The October release of Skylanders: Spyro’s Adventure has changed that, though. By combining physical action figures with a unique peripheral and a video game, the title has captured the attention of the mass market (and more than a few core gamers). While sales figures aren’t yet available, the game has buzz – often a critical factor in long-term success.
Three years ago, 
when Activision was trying to figure out what to do next with the long-running Spyro the Dragon series, it really didn’t have ambitious plans.
While the character was tremendously popular in the PlayStation 2 days (when Ratchet & Clank/Resistance developer Insomnia Games was running the franchise), a string of mediocre sequels had long since dulled its earnings potential. But a radical idea from Toys For Bob, a developer most gamers had never heard of, quickly convinced the company to bet big on the little fire-breather.
Chris Morris: Journalist 