FORTUNE -- Before ToyTalk launched its first product this September, a free iPad app called The Winston Show, CEO and founder Oren Jacob expressed some doubt that his startup's vision -- creating a plaything capable of holding in-depth conversations with kids -- would resonate.
"I am confident this will never work in a preschool with 30 kids in it," Jacob told Fortune earlier this year. "But if you're with a child and having a tea party with three dolls and tea, tossing some Legos and trucks around, well, I think we have a shot at that."
Three months in, Jacob is likely breathing a little easier. Backed with nearly $16 million in funding so far from backers like Greylock Partners, Charles River Ventures, and Path CEO Dave Morin, expectations for their debut ran fairly high given the co-founders' pedigree: Jacob once served as Pixar's (DIS) CTO, and ToyTalk's chief creative officer, Bobby Podesta, served as supervising animator on Toy Story 3. (Podesta has since left the company.)
The Winston Show became the No. 1 most downloaded entertainment app in Apple's App Store; downloads number in the six digits, exceeding the company's initial expectations. To keep the momentum going, it released an app update, doubling the amount of interactive content to 12 hours and introducing a new play mode called "In the Movies."
Here's how the app works: Kids set within several feet of their iPads, while the tablet displays an image of them and a digital character onscreen. Facing the tablet, users talk to a wry British male character named Winston, voiced by Bay Area-based actor Dan Clegg, who has voiced thousands of lines of dialogue to date.
The conversation itself is driven by what ToyTalk calls "Pullstring" technology, a complex set of speech and visual recognition software developed by the company's 21-strong team that picks up on and adapts to factors like context and timing. The goal: create and sustain a compelling conversation.
With twice the amount of conversational content now, it's ToyTalk's aim that The Winston Show be more engaging than before. "In the Movies" mode also enables the user to star in a fictional movie scenario -- a mystery or space adventure -- where new onscreen characters interact with the user. The latter was developed based on what the company observed from users post-launch: Many used it "more like they would with television than a traditional iPad app," says Jacob.
If that's the case, it's a promising early sign for the company and its hugely ambitious goal of advancing consumer entertainment to infinity ... and beyond.
You likely haven't heard of one of the most ambitious startups to emerge this year. ToyTalk wants to revolutionize talking toys.
FORTUNE -- Talking toys are a dime a dozen. But intelligent talking toys? Not so much. The amount of computer code and processing power needed to pick up on the nuance of human conversation -- even one with a child -- is vast. More importantly, being entertaining requires different skill sets MOREJP Mangalindan, Writer - Feb 22, 2013 6:51 AM ET
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