Michael Acton Smith is moving to a creative leadership role at Mind Candy, the founder told the Guardian on Friday, as the company moves to more aggressively target the US market and gear the company up for floatation.
Acton Smith said a new chief executive had not been found but that chief operating officer and chief financial officer Divinia Knowles would become interim president of the firm.
"My role is very different now to when we started the company and I've drifted away from the creative side that I really enjoy," said Acton Smith. "It sounds dramatic but it's exciting, and means I can spend more time building up our sketchbooks and doing creative things like developing new characters."
Mind Candy has seen huge success with Moshi Monsters, a children's game that has been successfully franchised into a wide range of merchandise, but had been caught out by the rapid adoption of tablet games by children.
There was also concern the company was too dependent on Moshi, which led it to develop the new mobile game PopJam, and the new game World of Warriors, developed by its studio in Brighton.
Knowles has been with the company for eight years, and says she thinks the company can realise its big ambitions of "becoming the next generation of family entertainment".
The Guardian understands that Mind Candy had tried and failed to secure valuations of $1bn from US investment firms during 2013.
Acton Smith would not say whether a new CEO has been found, but it is likely that the US market will be a priority for the firm.
Saul Klein, of Mind Candy investors Index Ventures, said Mind Candy has always been very ambitious, and that it wants to be the Disney for the 21st century.
"None of us want our children playing on Facebook or SnapChat – MindCandy is stepping into that breach to offer a safe, creative digital environment for children," said Klein.
He emphasised that Mind Candy's priorities are to develop games for mobile and to expand its portfolio of games brands.
"Ultimately, our ambition is to take Mind Candy public," said Acton Smith. "We can do that for more than $1bn. We're super ambitious, and Europe needs more technology startups to be super ambitious."
Games industry commentator Nicholas Lovell wrote in response that the new CEO will have to grapple with Mind Candy's identity.
"Mind Candy is essentially two different operations: It is a lower-growth merchandising business that has a popular brand (Moshi Monsters) that it can continue to exploit through multiple channels [and] it is a scrappy startup that needs to discover who its customers are, how to reach them, what they value and what they will pay for," he wrote.
"Mind Candy has a whole big team executing against a plan. But its challenge is not to deliver what it did last year but 10% better (or 50% better, or 100% better). It is to disrupt and avoid being disrupted. It is to take the tenets of the Lean Startup and focus on the tricky phases of Customer Discovery (who are my customers), Customer Validation (can I persuade them to love my product) and Product/Market Fit (can I get them to give me wheelbarrows-full of money).
"That’s a start up mentality. And trying to innovate like a scrappy startup when your organisation is naturally ossifying into a corporation is very difficult."
On Glassdoor, a site which allows employees to review their employer, 18 reviews by people claiming to be current or former staff were mixed. Most described talented, ambitious people but several indicated they disapproved of senior management, including the CEO.
• Moshi Monsters creator Mind Candy launch PopJam as 'Instagram for kids'
