From the press release:

What is Magic Town? 
Magic Town is the first virtual world based on popular picture book characters. As children explore the vibrant landscape and click on the houses, they’ll find stories, games and puzzles. The stories are presented as Livebooks™, our proprietary, interactive story format.  

Why Use Magic Town?
Reading captures children’s imagination, sparks their creativity and engages them in critical thinking skills. In today’s world, however, digital games and apps compete for children’s attention and parents sometimes don’t have the time to sit and read with their children. Magic Town brings families together, inspiring them to share stories. Magic Town is also a source of technology that can support children’s early literacy development. Magic Town is fun, safe, easy to navigate and age appropriate.  

Where Can You Use Magic Town and What Does it Cost?  
Magic Town launched as a website in May 2012. It will be available as an iPad app soon, and will later be released on iPhone, iPod touch, and other devices. All users have access to a new free story every day. A subscription gives users full access to Magic Town, and the ability to set up profiles for four children. 

There are several pricing options: One Month: £7.99 / $11.99 / €9.99:  Six Months:£39.99 / $59.99 / €44.99 One year: £49.99 / $74.99 / €59.99.   

The Magic Town Back Story
Max and Izzy are Magic Town guides. They welcome visitors and show them around. They introduce Louis the Storyteller, a wise old lion who has travelled around the world collecting stories. When Louis arrived in Magic Town, he planted his staff in the ground and up sprouted a tree bearing stories. Each time a child visits Magic Town, Louis presents a new story of the day. It is up to the child to unleash the stories and bring Magic Town to life. The stories and games appear in character-based houses that populate the Magic Town landscape.  

Features

Every Child’s Magic Town Experience is Different
Magic Town uses games technology to deliver a customised experience for each child. The system’s algorithm suggests new, appropriate content every day based on user input. The more frequently a child visits Magic Town, the more stories and games are added to his or her world.

Livebooks™
Each story in Magic Town is presented as a Livebook™, our proprietary interactive format that aims to stimulate the development of young children through educational, interactive tasks. The Livebook tasks engage children with the characters in the stories and are similar to the questions trained teachers use as a regular part of storytelling time. 

Livebooks were developed with input from early childhood development experts and educators, including Professor Paul Harris of the Harvard Graduate School of Education. The Livebook format has evolved through testing with primary and preschool teachers in Boston, Los Angeles and London.

Each Livebook™ has four reading modes:
●    Explore:  A narrator reads the story, which includes animation, sound effects and interactive tasks and questions. The questions are based on the child’s age, educational level, and the number of times he or she has explored that book.  The questions appear at logical places in the story, prompting the child to think before moving the story forward.  
●    Read Together:  An adult or a child reads the story aloud. The pictures are animated.  This is an ideal way for parents and children to enjoy stories together.
●    Watch:  A narrator reads the story which plays like a video, with text displayed underneath the animations. This mode works well on car trips or just before bedtime.
●    Play:  A narrator reads the story, but children control the pace by clicking on characters or objects to move the action forward. This mode encourages active listening skills.

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