Neopets, a Viacom subsidiary, has officially graduated to the increasingly familiar free-to-play, pay-for-goods format. The world of quirky virtual pets, targeted at kids, announced they will now allow users to purchase virtual currency called Neocash, which they can spend on virtual toys, clothes and special effects for their Neopets.

The new cash won't conflict with the existing currency system, called Neopoints, which kids can earn through quests and mini-games. Players can trade Neopoints for goods, but they won't be interchangeable with Neocash. Initially, the only way to score Neocash will be to purchase it via PayPal, but the company aims eventually to explore other avenues to sell the currency, such as pre-paid cards available at retail outlets.

Additionally, the availability of Neopets goods for purchase coincides with the beta of Viacom's new NC mall, which will house virtual boutiques where kids can shop for add-ons to their pet and its world. Neopets will work with Nexon, a Korean online gaming specialist, to handle the virtual transactions, as an extension of a partnership between the two announced last November.

Up until now, Viacom's revenue from Neopets came from the sale of banner advertisements on the site, which boasts over 40 million registered users around the world, and more than 12 million unique new users monthly. Viacom purchased the Neopets world in June 2005, to the tune of $160 million. Given such a large installed base and continued global expansion, the sale of virtual goods in the Neopets world may well prove to be enormously lucrative for Viacom.

Our sister site, Gamasutra, ran an announcement Nickelodeon Kids and Family Group president Cyma Zarghami made at this week's Casual Connect conference in Seattle. According to Nickelodeon, it's committed to invest $100 million over the next two years in development, distribution and creation of casual gaming titles, sites and platforms.

According to the company, the investment is a part of MTV's strategy to secure a leading role in the gaming space -- including casual, console and handheld games, as well as related media, which includes virtual worlds. Of the initiatives announced, Nickelodeon also says it'll use some of the money to add new multiplayer games and tournaments to Nicktropolis.

The investment will also support the expansion of AddictingGames to include casual MMOGs with the introduction of AddictingWorlds. AddictingGames recently partnered with Habbo, adding another virtual world to its existing partnership with sister site Neopets. According to the article, increased emphasis will be placed on user-submitted games on the site, including more prominent upload capabilities and game-making engines.

Also announced was the upcoming transformation of Neopets into Neostudios, which will focus on developing new virtual world gaming experiences online while continuing to grow and evolve the existing ones. The first of these will launch at the end of 2008 with the goal of launching a new game every other year.

"Particularly in the kids' space, with more than 86% of kids 8 to 14 gaming online, we see great momentum for online casual gaming," said Zarghami. "This investment will not only benefit our audiences, but also our marketing and distribution partners."

Jakks Pacific and Nickelodeon & Viacom Consumer Products announced that they have executed a domestic-based master toy licensing agreement to produce a variety of products based on the Neopets virtual world, by which Jakks will create a full line of toys and merchandise to capitalize on Neopets and its characters. The Neopets world lets kids adopt virtual pets, accumulate points for virtual goods, and play minigames.

According to comScore, Neopets drew 5.9 million visitors in the month of August, making it Neopets' strongest month yet and marking a 50 percent increase over the same period last year. The company says 'tween users spend an average of 2 hours and 33 minutes on the site.

The Jakks toy line will focus on plush Neopets toys, but the aggreement also covers action figures, accessories, playsets and plug-and-play interactive toys, as well as role-play products, vehicles, youth electronics, water toys, novelties, stationery products, kites, and craft activity toys. Jakks’ Neopets collectible plush products are expected to begin to hit retail shelves in early spring 2008, with figures, playsets and other Neopets products shipping to retailers nationwide for fall.

Additionally, the plush toys and other upcoming Neopets consumer products will tie into a new multiplayer “Neopets Key Quest” in the game. The toys will contain codes that allow kids to unlock virtual extensions of the toys to use as part of the Neopets Key Quest game, with virtual versions of the toys represented in the users' Neopets profile.

"We plan to add engaging real world components to the already hugely popular virtual world of Neopia," says Jakks CEO Stephen Berman, "and maximize the deep online connection kids have with Neopets through a collectible roll-out strategy, which is one of Jakks’ core strengths. Neopets has all the makings of a great toy property.”

“Consumer products based on the Neopets brand will continue to expand to mass retail in 2008," added Nickelodeon & Viacom consumer products president Leigh Ann Brodsky. "We are thrilled to have a creative partner like Jakks Pacific aboard as our master toy licensee.”

Capcom and Nickelodeon virtual world division Neopets have announced a partnership to create Neopets Puzzle Adventure (working title), a new puzzle-adventure title for the Wii, DS, and PC.

Scheduled to ship for all three platforms this holiday season, Neopets Puzzle Adventure will be co-developed by Capcom and Infinite Interactive, the studio behind multi-platform hit Puzzle Quest: Challenge of the Warlords and other titles in the Warlords franchise.

The Neopets virtual world boasts over 44 million global memberships. Users can care for Petpets, virtual pets, as well as play games and interact with each other through various community features. Free registrations are available for the online world, but users can pay an optional monthly fee for an enhanced experience and premium content.

Neopets Puzzle Adventure’s puzzles will be based on classic board game Reversi, integrating more than 150 customizable Petpet creatures into the experience. Over 300 items, 150 quests and several mini-games, all based on the series’ Neopia setting, will round out the title. Players will also be able to earn codes by achieving certain goals, unlocking exclusive items on the Neopets site.

Said Capcom Entertainment’s senior vice president of licensing Germaine Gioia: “Capcom is working to expand the breadth of our catalog to gamers of all ages in North America and Neopets is a perfect brand for us to bring to casual and family gamers. Combining Capcom’s experience, the rich world of Neopets, and Infinite Interactive’s skills in the puzzle/adventure genre makes a perfect match.”