Toy Story: the Intel and Mattel Startup


With the North American International Toy Fair set to begin next week and speculation building around a Google-Mattel announcement ahead of the show, few people may recall an earlier partnership between Silicon Valley and the venerable toy company.

In the late 1990s Intel and Mattel forged a unique relationship that led to a series of connected toys, which also provides some interesting insight into early thinking around smart toys and user experience.

Mattel Inc. and Intel Corporation went beyond collaborating on devices; the two companies actually created a startup and gave it a brand of its own. Aiming to combine the technology and innovation around computing at Intel with the toy-design expertise of Mattel, the joint venture became the birthplace of several “smart” toys under the Intel Play brand.

Herman D'Hooge managed Intel's side of Smart Toy Lab
Herman D’Hooge initially managed Intel’s side of Smart Toy Lab

According to Herman D’Hooge, who managed the Smart Toy Lab initially, Intel was (and still is) constantly looking for ways to extend the use of the personal computer in the home. Today, it’s RealSense 3D cameras and perceptual computing, but back then the connected toy offered a unique new usage for families and children. Ironically, one of the toys produced offered an early look at today’s perceptual computing concept.

“My team was trying to understand how computing in the home could be useful away from the computer,” recounts D’Hooge. “One of the areas we identified as an essential area of interest was things that kids play with…and that led us to think about toys as a new category as a peripheral for computers.”

Around this same time, Mattel was looking to counteract the erosion of its toy consumers to video games. According to D’Hooge, after doing some market research, Mattel realized if it could license the Intel brand, it could potentially generate more revenue for its toys. When the original concept was presented to Andy Grove, who was Intel’s CEO at the time, his reaction was lukewarm at best, says D’Hooge. D’Hooge paraphrased Grove’s response as “Intel is about real technology and not plastic toys.”

The Eugene Register Guard covered the Smart Toy Lab in February 2000. (source: Google News archive)
The Eugene Register Guard covered the Smart Toy Lab in February 2000.
(source: Google News archive)

Eventually, however, Grove came to embrace the partnership. In the spring of 1998, executives from Mattel’s Strategic Planning Department and the Developer Relations Department at Intel decided to further explore the idea of creating interactive high-tech toy concepts and developed a business plan that led to the birth of the Smart Toy Lab. According to D’Hooge, the lab was designed to act like a startup. They even leased space in a trendy neighborhood in downtown Portland, away from the office complexes at Intel a dozen miles away in Hillsboro, Oregon.

“It was a collaborative project,” says D’Hooge. “The philosophy was to keep our headcount very small, keep under the radar so we could move quickly without being burdened by any internal bureaucracy or processes and approval loops.”

The initial vision of the team was to create toys that were fun, open-ended, educational and innovative, but they also had to be perceived as being high-tech and had to involve a personal computer.

By the summer of 1998, the Smart Toy Lab had developed eight toy concepts, three of which were chosen in the fall of that year as ones to market under the new “Intel Play” brand: the Intel Play QX3 Computer Microscope, the Internet Discovery Set and the Intel Play Me2Cam Virtual Game System. Another, the Internet Discovery Set, which would have used a radio frequency (RF) tag reader to allow kids to browse websites based on RF tags in toys, was too complex, owing to the fact that it needed Internet safety controls and browsing software specifically designed for kids. The team decided not to pursue development of this concept.

The whimsical Intel Play logo, using a previous version of Intel's logo that appeared on Intel Play products.
The whimsical Intel Play logo, using a previous version of Intel’s logo that appeared on Intel Play products.

In February 1999 at the International New York Toy Fair, early prototypes of both the QX3 Microscope and the Me2Cam system were presented. And based on positive feedback, the Smart Toy Lab rushed to get the products into mass production in order to hit the 1999 holiday shopping season. The QX3 was available by September 1999 and the Me2Cam by October. The QX3 was rated the top-selling multimedia toy of the 1999 holiday season.

Instead of operating like a traditional optical microscope, the QX3 contained a built-in camera that transmitted live video via a USB connection to a PC. Using a complementary metal oxide semiconductor (CMOS) sensor, miniature halogen bulbs and lenses, and optical magnification of up to 200x, the QX3 was able to compete with entry-level laboratory microscopes on the marketplace at that time, all while hitting the desired $99 price point.

The Me2Cam Virtual Game system, release in 1999, consisted of a USB-connected camera and a series of immersive, virtual games that users played using movements and gestures.
The Me2Cam Virtual Game system, released in 1999, consisted of a USB-connected camera and a series of immersive, virtual games that users played using movements and gestures.

The Me2Cam, priced at $69, was a tethered, USB PC camera. Consisting of a series of interactive and immersive, arcade-style games, the Me2Cam was one of the first, commercially available, consumer-oriented PC application products using computer vision technologies. After a user’s background was masked out by the Me2Cam software, the user appeared on the computer screen and could interact with five virtual games via gestures, movement or by “touching” objects. Using gestures to manipulate objects on the screen was a precursor to Intel’s Perceptual Computing Initiative today albeit with far less compute power and lack of 3D cameras.

A variety of factors led to the eventual closing of the Smart Toy Lab, including the dot-com bust, limited revenues from the venture and internal changes at both companies. In May 2000, Intel and Mattel decided to formally dissolve their joint venture. Intel’s Connected Products Division, however, continued with the Intel Play toy line, hired a few Mattel personnel and over the next year, produced two additional products: the Computer Sound Morpher in the fall of 2000 and the Digital Movie Creator in 2001. These were the last products produced under the Intel Play brand.

In March 2002, Intel discontinued the Intel Play brand, and it was sold and rebranded under Digital Blue, part of the Prime Entertainment holding company. The QX3 microscope, while discontinued, can still be found for sale online. It has since been replaced by the QX5 and QX7, which are both based on and build upon the original design from Intel Play.

This content was originally published on the Intel Free Press website.

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