What makes the kids market so lucrative is it’s not just a TV show. It’s not just a movie. It’s the whole ecosystem of entertainment. Kids want the action figure, the backpack, the Happy Meal, and the theme-park ride. There are dozens of little touch points, where parents pay for a brand experience and the brand experience is highly emotional. It gets back to kids’ hunger to interact with something they love. What Angry Birds and Cut the Rope are both trying to do is take control of and democratize that part of the equation too.

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This is where apps like Angry Birds or Cut the Rope have a stranglehold on anyone who markets to children: If brands are being created in the App Store, they have a direct line to kids. Do they really need Mattel, Hasbro, Disney, and Dreamworks? They don’t trust them. “Why enter into a marriage, if you know it’ll only end in divorce?” says Lyalin. (There were a lot more reasons for his mistrust, but that all falls into the off-the-record bucket unfortunately.)

These companies are creating original content. But make no mistake — if they succeed, they disrupt a lot more than just Hollywood.

It’s a dramatically new way of doing business that most toy makers don’t get.