Summary: The Pleo robotic toy dinosaur drew universal acclaim when it was introduced in 2006, but has so far failed to make its manufacturer successful, largely because the $349 price is more than twice that of all but one competitor. Ugobe, which developed the “staggeringly lifelike” Pleo with 14 force-feedback sensors, dual 32-bit microprocessors and a microphone pickup in each ear, has shrunk its workforce by half and moved the 20 survivors from the Bay Area to the company’s hometown in Idaho. Its founders still believe Pleo, and its list price, will survive; Robotics Business Review is not as optimistic.cam
Although it made a big initial splash with the introduction three years ago of the comely but pricey Pleo robot toy dinosaur, the robot’s manufacturer, Ugobe has hit hard times. After reviewing the company’s current situation and ability to follow up on its initial success, we now wonder whether the company itself will go the way of the dinosaur.
The past nine months have been turbulent ones for Ugobe. The company, like so many organizations, responded to volatility in the economy and its business by cutting its work force, changing its management and relocating its headquarters — in this case from the tech-centric Emeryville, Calif. to Eagle, Idaho, where the company was founded. Also, Ugobe has changed CEOs twice in less than a year, seen the entire board of directors resign and trimmed its workforce down to about 20 employees.
All this comes at a time when Ugobe is in the procweess of re-positioning the marketing and the messaging around its elite Pleo robotic Camarasauraus. Though Ugobe was a media darling after the Pleo was introduced, more recently media outlets have complained that no one answered Ugobe’s phones and that email requests for interviews bounced back. Many, inevitably, asked whether the company was still in business.
“Yes, we are very much in business and looking forward to the future,” said Ugobe president and chief operating officer (COO) Doug Swanson, who responded promptly to Robotics Business Review’s interview request.
Not only is the company still in business, it announced in June that it had raised $12.8 million in a third round of venture-capital funding, largely from existing backer Hyield Venture Capital and Frontier Management Group. The additional funding will help the company continue to operate in its reduced circumstances and new location.
Company executives said none of the company’s current problems stem from the Pleo product itself, or from its pricing. We at Robotics Business Review do not share that belief.
Pleo created a sensation, garnering almost unequivocally positive reviews when it was first introduced back in 2006 — praise that continues to this day.
For example, in a Dec. 31, 2007 review, Today Show gear and technology editor Paul Hochman raved about the Pleo’s “staggeringly lifelike responses.” “You literally feel as if you are relating to the little beast — rub it under the chin, and it extends its neck for more,
closes its eyes and purrs like a cat. Offer Pleo a leaf and it will bite gently into it and pull back playfully, like a dog with a stick,” he said.
Ugobe founder and Pleo inventor Caleb Chung is no stranger to high praise in the robotics toy industry. He co-invented the Furby robotic toy that created its own sensation during the 1998 and 1999 holiday seasons.
Chung’s vision for Pleo went far beyond Furby and many other toys that contained rudimentary robotics.
After founding Ugobe, he assembled a team of robotics specialists, animators, technolo gists, scientists, biologists, and programmers and charged them with building a dinosaur toy with sensors, articulation and neuronetics that could deliver astounding movement and responsiveness.
Pleo, which has its own community oriented Web site for fans and owners, incorporates a host of expensive components: eight skin sensors (on head, back, feet, chin and shoulders); 14 force-feedback sensors (one for each joint); two microphones for binaural hearing; four foot sensors for surface detection and two 32-bit microprocessor logic chips that enable Pleo to adapt its behavior as it gets older so it can respond to sounds and touches with lifelike emotions.
The infrared sensor in Pleo’s mouth detects food. Others provide a vision system that lets Pleo recognize and respond to specific objects. The initial version also had a beat detec tion sensor, so the baby Camarasaurus could dance and listen to music. Ugobe engineers removed that in the shipping version, though it may reappear sometime this year.
Reviewers consistently wrote that Pleo’s features and sophistication outstripped every other toy on the market.
Slate magazine reviewer Daniel Engber gave Pleo top ratings in his roundup of animatronics pet toy offerings. He praised Pleo for its “lifelike movements.” Like most other reviewers, however, he was less happy about $349 price tag, but did write that “you get what you pay for.”
Will Pricing Kill Off the Dinosaur?
At $349, Pleo is not only far beyond its competition in technical abilities, it’s also the most expensive robotic toy designed for the mass market — by a wide margin.
Prices for its competitors range from $15 on eBay for the Furby from Tiger Elec tronics (a division of Hasbro Toys), to $60 for Fisher Price’s Elmo Live (a descendant of Tickle Me Elmo).
Hasbro’s next generation successor to Furby will up the ante a bit. Its FurReal Friends Biscuit My Lovin’ Pup will sit, stand, beg and give you his paw for $160.
That price, though steep, is still less than half what Pleo costs. In fact, the second most expensive robotic toy, Playskool’s Kota the Triceratops, lists for $270, which is 23 percent cheaper than Pleo.
Robotics Business Review’s own research shows that consumers are generally unwill ing to pay more than $150 for any kind of robotic toy, no matter how sophisticated.
Given the realities of the toy market, price of competitors and state of the economy does Ugobe have any plans to reduce the price of Pleo? Swanson responds to the pricing question by changing that price comparisons with other robotic toys is unfair.
“The simple answer is that PLEO is not a toy. It’s not consumer electronics, it’s not a pet, it’s not a video game, it is a hybrid of all of these,” Swanson said. “It’s a new market called Life Forms.”
Ugobe’s current straits have little to do with the price of Pleo, according to Swanson, who blames marketing missteps and an inability to explain the real sophistication of the hybrid robot early on. Ugobe’s initial marketing did a “terrible job” of introducing a product that has remarkable new leading edge AI capable of adapting and learning, that is housed in 1800 parts, 160 gears, five transmissions, nearly three miles of wire, and is hand built, Swanson said.
Ugobe, Swanson said, sold 100,000 units of Pleo worldwide in its first year. “But we failed miserably in the U.S. market. In the rest of the world it [Pleo] is a companion and in Italy [it is] a fashion statement,” Swanson said. Both Swanson and Chung remain upbeat about the company’s chances for a turnaround.
Faith in Premium Pricing
Despite cutbacks in consumer spending and the ongoing global economic downturn, Ugobe managers are still betting that cash-strapped consumers are willing to plunk down $349 for the Pleo.
Given the current state of the economy that seems unrealistic, particularly at a time when U.S. pet owners are leaving their own real live pets at animal shelters in record numbers because they can not afford the upkeep.
Historically, many consumer robotics firms failed despite promising and initially popular products. The Tiger iCybie and the Sony AIBO provide two examples..
Ugobe desperately needs to spend its venture backing and probably generate more to continue its R&D, market-development and, we recommend, some additional research on pricing. Unless Ugobe takes drastic measures and slashes Pleo’s price tag to a more reasonable level of $150 or less — which may mean shedding some of those 1,800 parts and getting rid of some of the 160 gears — Pleo as a “Life Form,” and possibly Ugobe itself, will almost certainly become extinct.