Beasts are peeking out of every nook and cranny in the office, a crazy infestation of plastic chaos.

The figurines sit on shelves, hang on walls, tumble on desks in states of unpainted nakedness, dismantled and incoherent. They gurn, snarl and claw in an infinity of static poses.

This is the place where the little plastic creatures of Activision's breakout monster hit Skylanders are conceived and birthed, the headquarters of Toys for Bob, a tiki-pirate-ship-themed ex-aircraft hanger in Marin County, California.

Since its introduction back in 2011, the Skylanders video game and toy series has generated upwards of $2 billion in lifetime sales. It is one of the top 20 game franchises of all time, with 175 million toy sales. The Skylanders monsters have captured the imaginations of millions of children, by creating a magical illusion.

Players place monsters on a plastic tray that is connected to a console, (called a Portal of Power). The same monster appears on-screen, in game. The toys "remember" their in-game achievements and modifications. These dragons, imps, elves and griffins are portable and playable both with, and without the game.

Skylanders bridged the gap between video games and toys. It caught the snoozing toy industry completely by surprise. It vindicated publisher Activision's expansion plans. It also saved Toys for Bob, which is currently celebrating its 25th year in business.

"Really all the stars lined up for us," says co-founder Fred Ford. "Activision had the appetite to take a risk. They had the money to make toys. They let us do a skunkworks development. We took the opportunity."

If you had been asked, say, ten years ago, to pick the most successful extant game developers of the future, it is doubtful that you'd have chosen Toys for Bob. Back in the 1990s the development house had chugged along and created a decent and eclectic portfolio of games published by so-so entities like Accolade.

In order to pay its bills, the firm became a dependable little house churning out children's licensed action adventures for Activision. When the licensed business went to hell around 2008, at the same time as the global economy bombed, Toys for Bob was faced with the problem of creating a hit new franchise, deep into a console generation, a time when "new IP" faces the steepest of uphill battles.

Ford (right) and fellow co-founder Paul Reiche (left) are that rare thing, a business partnership that has lasted. A quarter of a century after they met, while as students at U.C. Berkeley, they still share an office.

Interviewed together, they return again and again, almost with a sense of wonder, at the kismet of Skylanders, the way everything came together. They make the conventional obeisances to their creative staff members, and they accept their own part in the success. But they love to talk about how good fortune also played its part. "Skylanders is a game we have been teaching ourselves to make for over 25 years," says Reiche.

It is the culmination of things that happened in their lives, and events over which they had no control. It would be too much to pin this success on luck or fate, but those two skallywags played their part.

This is the story of how an unfancied development house made one of the biggest gaming hits of all time, and the list of weird stuff that helped to make it all happen. Beginning with...

POISON OAK

Paul Reiche is the game design part of the founding duo, while Ford is the programming guy. Reiche was always a fan of games, but as a bright student, he had other ambitions. He wanted to be a geologist, he wanted to dig around in the dirt.

"I love geology and geography," he says. "To be able to see a piece of rock or a waterfall and see a story. It's like when you're a kid, standing on a hillside, and being told that it was all once under thousands of feet of ice."

But his aspirations were thwarted by toxicodendron diversilobum, aka poison oak. "Field geology is best done near faults, where there are lots of ravines," he says. "Poison oak loves ravines. I was rolling around in this stuff. I am deathly allergic to poison oak. I mean hospital-visit-allergic. I puffed up like a giant bright red marshmallow. I had to do something else, so I started making games."

DUNGEONS AND DRAGONS

Both of the founders are of that pre-videogame generation that grew up playing Gary Gygax's tabletop fantasy D&D. But their interest in the world went way beyond a teenage phase. Reiche created richly detailed fantasy books about D&D, lovingly dwelling on the powers and mythos of individual creatures.

"I like wizards and humans, but monsters are so passionate," says Reiche. "They have a lot more excitement, enthusiasm and energy. The variation that you get in size and scale and material ... I really like complicated set-ups that are rich, heterogeneous things. I like the sense of stuff that is almost out of control."

He and Ford connected through a shared passion for gaming and fantasy. They were both nuts about monsters. "With monsters, kids can use their imaginations," says Ford.

"Having a group of soldiers who will do exactly what I say is way less interesting to me than having this crazy band of monsters who can't be contained," adds Reiche. "That madness and variation is appealing. We found a way to make a profession out of that."

STAR CONTROL

Reiche worked on writing some games in the early 1980s, including the still-admired Archon, an early hit for a then fresh-faced start-up called Electronic Arts. Ford worked for a variety of games companies through the 1980s.

When they reconnected and decided to launch Toys for Bob (the name has nothing to do with toys; it was chosen so it would stand out from the many other new development houses of the time) the company's first game was a space-shooter Star Control for the Commodore Amiga and MS-DOS PC.

The game is stuffed with back-story and fantastical narratives, very much of its time. But it also featured a combat complexity that was unusually layered, especially in its melee mode, which introduced deep strategical elements. The units had balanced strengths and weaknesses. "We were really learning about combat," says Ford. "From the beginning our fighting games had a more rock-paper-scissors feel about them. Your choice about who is in your team starts to really matter. Skylanders has that same thing. It's all asymmetric combat."

MADAGASCAR

For the next decade Toys For Bob worked on a variety of genres including a 3D fighter (The Unholy War), a platformer (Pandemonium) and an action strategy hybrid with FMV elements (The Horde). They were all received with moderate enthusiasm, though none were major hits. The company was dabbling and learning, but it wasn't making a great deal of money.

"As we got bigger we needed to have solid work," recalls Reiche. "The success of licensed games was just undeniable. They were making tons of money. We needed to participate with what was going on. There was a predictable thing about licensed games."

He picked up contracts to work on licensed games, beginning with Eidos' 102 Dalmations in 2000. Activision gave the firm Disney's Extreme Skate Adventure in 2003. Flush with licensed games booty, Activision bought Toys for Bob in 2005, and had the company work on key property Madagascar.

Toys for Bob, it turned out, was pretty good at making these fairly formulaic kids' games. They scored solid numbers in reviews and they sold very well. "There is actually a real joy about the craft of coming into work and making something that makes kids happy," says Reiche.

"Those games were training grounds for us. Before then, we were largely ignorant of how to make roaming 3D platform games. Madagascar also taught us the most about how kids relate to these worlds. For example, you can't give kids a branching path. They stop. They get frustrated. They don't know what is being asked of them."

But there were a lot of games like Madagascar at the time, and kids grew tired of the formula. The market deflated. "Even the best licenses were making a half or a third of what they had made," adds Reiche. "It didn't make sense for Activision to have an expensive studio doing that. So there was a conversation along the lines of 'so, guys, why don't you figure out an idea and really make it good and get it done soon'. There was an underlying 'or else' because studios are born and then they live and then they go away. It's like life."

After a comfortable few years making licensed games, the Toys for Bob team needed to come up with an entirely fresh, new idea. They had to magic up something they hadn't really produced in 20 years; a big, self-generated hit.

I-WEI HUANG'S MODELS

Bosses will always say nice things about their staff, especially when they have been working together for a long time. And Toys for Bob has a lot of talented people. But there were some who had exactly the right skills to create something as outside-the-box as Skylanders.

The team gathered together and began brainstorming. Inevitably, ideas graduated towards the skills and interests of the leading players. A lot of bad notions were entertained and then rejected.

Must Read

Inside the Skylanders Workshop

But they kept coming back to monsters, strategy, kids. Toy and character designer I-Wei Huang was tossing out images of creatures and monsters. Everyone liked them. He had a side-interest creating physical toys and robots. He knew how to take his pictures and turn them into models. When the idea first came up, of selling the game with attendant 3D toys, he was able to make the models.

The team could see how these characters might appeal to children. He was diligent about making the models exactly right, endlessly perfecting pose and facial expressions. "In the beginning I was just drawing characters and modeling," says Huang. "We were constantly hacking the toys and tinkering. The whole Skylanders thing came out of tinkering.

"The most important thing is thinking like a child," he adds. "It could be a certain kind of dragon or a sword or even a look. If it makes you chuckle when you see it, then we got you. They had a heroic likeability as well as power and humor. A lot of it is instinct."

ROBERT LEYLAND'S BASEMENT

Huang shares a section of the office with Robert Leyland, a programmer who, like Huang, had a side-hobby that turned out to be fortuitous for the team. Leyland's passion is fiddling around with electronics junk, taking stuff apart and putting it back together.

When the team started talking about pulling toys and games together, they needed a conduit between the two, a portal that connected the real world and the virtual world. Leyland went to work.

"They were looking for new ways to interact with the consoles, alternate ways to connect with the device," explains Leyland. "I said, I can do that. I dug up cables and wires and electronics stuff from my basement."

He had already been interested in finding new ways to interact with Nintendo's motion-control Wii. That machine's universal input systems and its massive popularity with kids made it an ideal test platform. He created a portal, using RFID [radio frequency identification) technology that would allow the toys to interact with the game.

"We got some RFID stuff and glued it to the bottom of toys," he says. "It worked. They told me to keep going. It was all a hodgepodge but it worked, and next thing, we were presenting it to Activision."

"No-one knew that he had this little bit of genius in him, this touch of Nicola Tesla," says Reiche. "People don't really acknowledge how amazing it is to put these toys on the portal and have them glow, and have them remember the adventures they have been in."

SPYRO

There was a wild card in Toys for Bob's planning. Following Activision's merger with Vivendi in 2008, the new company had acquired a hatful of old gaming franchises. Nervous about the prospect of launching an entirely new IP, Activision invited Toys for Bob to take its pick of any of the properties that were available.

With the Skylanders concept vaguely in mind, they chose Spyro, a purple dragon who had been the star of some well-regarded Insomniac actions adventures in the 1990s, followed by sequels and spin-offs in the following decade that attracted mixed reviews.

Certainly, by the time Ford and Reiche selected Spyro, the dragon was well past its prime, and there wasn't much in the way of online demand for a return. But the team saw the creature's potential. "A cute little fire breathing dragon was pretty awesome for us," says Reiche. "He is a solid character. He had a good name."

The choice was based on commercial and presentation calculations. Toys for Bob and Activision were worried that retail and media wouldn't really get their new idea. A hook was required, something familiar. The first game was called Skylanders: Spyro's Adventure. Today, Reiche credits Spyro with a lot of the franchise's subsequent success.

"It was a foot in the door for the press and for consumers because it was something that they could relate to," he says. "Spyro's world also defined a level of humor and silliness that was part of what Skylanders stands for. Spyro gave us that."

Skylanders: Spyro's Adventure was branded as a reboot for the dragon. But the magic was in the toys.

BOBBY KOTICK'S TABLE

When Activision CEO Bobby Kotick hosted Toys for Bob's internal pitch for the game's release, he only made one suggestion. It was not a popular one with executive underlings seated around the conference table. He wondered if the developers could use another year to polish their idea.

"He said, 'this game is okay now, but I think it could be amazing in another year'," recalls Reiche. "Every single person underneath him said, 'we disagree, it should go out this year,' because all their plans was based on the money that it was going to bring in and the teams it would free up. He just went [bangs table] 'nope'."

It was an unusual move in a business that moves fast, when new ideas are rarely unattended by at least one competitor, innovating along similar lines. Everyone in the meeting understood that entering the toy business would be extremely risky. Timing was key.

"It takes a lot of guts to say, yeah, we can handle making millions of toys. Safe, economical, fun toys," says Reiche. "We were terrified that one day all these millions of unsold toys would come back and fill our offices. It would have been the last thing we would have done."

"At that point our electronics didn't allow write-back to the toy so you wouldn't have been able to store your character on your toy. We had a really screwy way of emulating it," adds Ford, who believes the extra year made a huge difference.

"We got the price down and the toys looked better," adds Reiche. "Whatever people say about Bobby, he made a big difference with that decision. It cost a lot of money and it made a lot of people nervous but he made a good call there."

Activision was pursuing a strategy of 'less is more", focusing on a small number of franchises. At the time, Call of Duty was bringing in billions of dollars in revenue. Bobby had a lot of money to invest. He had also acquired a taste for the toy business.

GUITAR HERO

Activision had recently accrued a new expertise in the manufacture and distribution of plastic artifacts due to the success of one particular franchise, Guitar Hero.

At the time of Skylanders' development, the pretend-guitar games were at the peak of their popularity. Plastic guitars added valuable profits. Guitar Hero taught Activision a great deal about sourcing and manufacturing in China, and about securing retail space in toy stores, outside the standard box-sized video game sections.

"Activision had learned all about manufacturing plastic toys in bulk as well as all the problems of importing, warehousing etc," says Reiche. "We could not have done Skylanders on our own. As much as we might sit here and say, wow, two billion dollars, if that was all ours that would be great ... but we didn't have the know-how on the plastics and manufacturing side to say, yeah, we can make millions of toys. Not many companies in gaming know how to do that."

The toy business is a harsh tutor. Lucky for Toys for Bob, the sharp decline in music gaming's popularity had yet to come.

THE LONDON UNDERGROUND

Despite Leyland's best efforts, early prototypes of Skylanders had technical problems. There were delays between the toy being placed on the portal and actions on-screen. Because the tech was still developing, there were different options to choose from. RFID chips were expensive, adding to the cost of the toys. They were struggling to get the price down to a level that would work for cash-strapped parents.

Worst of all, the most expensive aspect of the project were RFID chips that could be written to, so that the toys could remember what modifications and achievements they had unlocked in-game. Reiche and Ford agreed that without this element, the toys might be seen as irrelevant, getting in the way of the game experience.

But RFID chips prices were coming down, rapidly, and the tech was improving fast. This was due to metro systems like the London Underground moving away from cash and tickets and towards RFID-based Oyster cards. "So there were billions of these cards being made and there was this race down in price," says Reiche. "Bless the London Underground because I think that was what did it for us."

The RFID reader is in the turnstiles. For every turnstile there are thousands of cards. But with Skylanders it's about three RFIDs to every reader. Skylanders has returned the favor. Activision is now the biggest distributor of RFID reader units in the world, with over 10 million portals sold "Now the RFID people come and talk to us when they have advances they want to make," says Ford.

NINTENDO'S DOUBTS

Despite its confidence and its cash, Activision was looking for a partner to help spread the risks of the new venture.

Nintendo, flush with the success of Wii, also with experience of the toy business, and with a reputation for "blue sky thinking," seemed like the perfect choice. Toys for Bob journeyed to Nintendo of America's offices to present the idea, very early in its development cycle.

"We had been directed towards thinking about something that would play well with Nintendo," says Ford. "I think there was some co-marketing money and the Wii was doing well. They had some success with peripherals."

"They spent a long time looking and looking," says Reiche. "They were just like 'we have never seen anything like this before.' I've always wondered about the full meaning of that comment [laughs]." Although there was a limited co-marketing deal, Nintendo did not want to make a full commitment to Skylanders. "We have no idea why," says Reiche. "Clearly, they have got properties well suited to this world. Why it is that they didn't rush in here will probably haunt them for the rest of their days."

A Nintendo-exclusive would have changed the shape of the project considerably, as well as adding the complexity of a business partner with a reputation for desiring granular control. It was a disappointment, at the time. Now, it looks like a fortunate escape.

Reiche is still surprised that the entertainment giant which reacted most quickly was Disney, which launched Disney Infinity in 2013 and is looking to expand the franchise. "Nintendo could have kicked Disney's ass," says Reiche. "If I was running Nintendo I would have jumped on this."

CHILDREN OF THE EXECUTIVES

As the project neared completion, the big fear was that the Skylanders world, the concept of the portal, and the design of the monsters, would somehow fail to connect with children. The kids market is notoriously capricious. Worse, the toy business was sewn up between a small number of manufacturers with immense power at retail level. There would be no second-chances. Skylanders would need to be a hit, from day one.

Activision's executives were looking at all the data to justify the money being spent on manufacturing and on marketing. But, in the end, their own kids had the final say. "Most of the executives had kids in this age range," says Reiche. "So the execs took these handmade toys that we had made out of sculpting clay and had hand painted and had their kids play with them. We never got one back. Not one. They flowed into the kids and they were gone.

"We were like, that's a good sign. These were tough guys [the execs] but because their kids loved the experience, that opened them up in a way that I don't think we could have done otherwise. So besides losing all our prototypes, it was amazing."

A BELIEF IN MAGIC

Those children, and the consumers who bought the first game and its sequels, saw the same thing that Ford and Reiche had seen, that Kotick had seen, and that parents of kids who play Skylanders also see. The figure sitting on the portal isn't just some hunk of plastic that gets between the player and the experience. It is alive. The toy inhabits the game, and is somehow imbued with the game, even when it is detached.

"It's a magician's trick," says Reiche. "You just have to make that trick really, really good for people to believe it, to feel like you are going in there together."

Skylanders has been through two further iterations since launch. In Skylanders: Giants, larger toys were introduced. In Skylanders: Swap Force, the toys came with interchangeable parts. Later this month, Toys for Bob will unveil the new generation.

The basic ethos will not change. "It is about having a companion in the world of imagination," says Reiche. "When you are a kid it's not an object, it's a character. This isn't just a toy."