Affective Media make emotion recognition software. I think the idea is to create tech products which respond to our moods, thereby making them more useful. Not just toys and games, but PDAs, home automation et al. Interesting concept all right. Check out the demo.
Emotion recognition enables artificial pets to understand our emotions and to react to them in a way similar to their real-life counterparts. Making our entertainment robots more pet-like can only help to bring them into our homes. Many interactive toys are now voice-enabled with pre-recorded speech samples…Emotion recognition can engage the child imaginatively by allowing the toy to respond to the feelings of the child. In this way voice-enabled toys can become less repetitive in their speech interaction and more dynamically involved in the games children play.