FunGoPlay is announcing today it is creating a sports virtual world for kids — a tough bet because virtual words are on the wane. But it is also partnering with toy maker EB Brands to create related sports gear in the real world.

The hybrid plan that combines an online business with real-world toys shows how companies are betting bigger in order to get new game properties off the ground in a crowded market.

The online game world will introduce kids to sports-themed games, customizable characters known as avatars, and other typical features of online games. But the real-world aspect is novel. EB Brands will make connected sports gear that rewards kids every time they use the gear in the real world. It tracks their play periods and then gives them medals, points, and power-ups in the online world. is targeting 6 to 11-year-old boys and girls. But parents will like the fact that will reward kids for exercising and being active with real-world sports gear, not just sitting on the couch and playing games on the TV, said David Jacobs (pictured), president of the New York company.

“This is the future of gaming that both parents and children can enjoy,” he said. David Mauer, president of EB Brands, said the FunGoPlay model could change the face of sporting goods. His Yonkers, N.Y.-based company will create the initial line of FunGoPlay sports gear.

The team includes veterans from across the entertainment, digital media and licensing industries. They’ve created a funny and light-hearted online sports world with games, characters, and lots of rewards and achievements. Kids can play virtual sports such as basketball, baseball, soccer, football, skateboarding and outdoor games. There are both single-player and multiplayer games within the virtual world. Pricing will be announced later.

Pricing will be announced at a later date. Jacobs is a children’s content licensing expert. He is joined by music pioneer Steven Lerner and writer Fabian Nicieza. The company has 15 employees and was founded in 2009.

Rivals include virtual world companies such as Action All Stars, Club Penguin, Moshi Monsters and others. But few are tackling a combination of real world and virtual world businesses, as that’s inherently a riskier bet.

The technology works through a unique coding system embedded in the products, which can track play with the equipment. The results are then communicated to the online world. The company has raised $3 million from angel investors and founders.