This conversation focuses on a book published in 1983 that examined "animism," the tendency to regard non-living entities as living and sentient. "The Intimate Machine" suggested that animism will be fully exploited by artificial intelligence (AI) and robotics, generating artefacts that will engage the user in "social" interactions so that eventually people will form close and beneficial social relationships with artificial "companion systems." The author of the book, clinical psychologist Neil Frude, is asked to reflect on his book and, although he admits that his techno-optimism in the 1980s was exaggerated, it is clear that he still holds to his major thesis. He considers "virtual pets," such as "Tamagotchi," "Furby" and "Sony's Aibo," and considers why they did not evolve into more sophisticated social artefacts. Frude identifies three vital elements needed for a successful artificial companion--animism, artistry and AI--and acknowledges that the last of these has been the weak link. However, even simple AI programs can make an impressive impact when skilfully implemented. He emphasizes the relevance of characterization, pointing to examples in recent computer-generated animations. In the context of interactive technology, the addition of character and artificial personality will generate companion machines that are highly engaging and exceptionally appealing. Insights into the likely nature and roles of artificial companions, and how people will relate to them, are available in the science fiction corpus, and this literature has also examined relevant ethical and social issues. Finally, he considers some of the possible clinical applications of such systems in both physical health and mental health and he also reflects on some of the potential dangers of the kind of artefact that he is envisioning.