With their hardware project cancelled, the company needed a new product to work on.

AT&T pulled out of the venture due to the cost of the device, leaving the company with half their initial funding. PF Magic was born out of a failed hardware venture with AT&T and Sega to build a Sega Genesis accessory called 'The Edge', which was to allow for online multiplayer over telephone lines. The project became Façade, a freeware game in which the player interacts with a couple whose ten-year marriage is in trouble. PF Magic's designer and programmer, Andrew Stern, created an experimental project with Michael Mateas and others for five years. The company also produced Max Magic, the world’s first electronic magic kit, which represented a breakthrough in interactive 3D character design. This early game failed in the marketplace, though it would inspire many of their following games, such as Petz. The innovative game featured main characters composed completely of spheres. One of PF Magic's earliest efforts was the 1994 video game Ballz, published by Accolade. After changing hands a few more times, Ubisoft now owns the copyright on its Petz, Oddballz and Babyz titles. It was bought out in 1998 by Mindscape, Inc. The company was able to make extra revenue by selling plush toys under the Petz trademark. Though it developed other types of video games, it was best known for its virtual pet games, such as Dogz and Catz.

PF Magic was a video game developer founded in 1991 and located in San Francisco, California, United States.

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