Happy Holidays — Smith & Tinker Cuts Staff

The game company has laid off around 15 people, or 30 percent of its staff, VentureBeat reported yesterday. Smith & Tinker confirmed the layoffs in a statement to the blog, which said the company had “staffed aggressively early on to meet deadlines for launching our product online and at retail this year” and needed “to bring our organization to healthy operational size for the remainder of this year and 2010.”

Smith & Tinker raised $29 million from several VCs in August, including the Foundry Group. Managing director Ryan McIntyre, who’s also on Smith & Tinker’s board, told me recently that the holiday season will be an important test for Smith & Tinker, because it will show how successful the company is at reaching a mass audience. Smith & Tinker’s game — Nanovor — is played with a device called a Nanoscope that’s sold in the toy aisles of mass market retailers like Target and is intended to appeal to monster-battling boys ages 7 to 12.

For more on companies like Smith & Tinker — which are creating games that find new ways to combine the physical and virtual worlds — see my story in the December issue of Venture Capital Journal.