With the fast economic growth and urbanization of many developing countries come concerns that their children now have fewer opportunities to express creativity and develop collaboration skills, or to experience their local cultural heritage. We propose to address these concerns by creating technologies inspired by traditional arts, and allowing children to create and collaborate through playing with them. ShadowStory is our first attempt in this direction, a digital storytelling system inspired by traditional Chinese shadow puppetry. We present the design and implementation of ShadowStory and a 7-day field trial in a primary school. Findings illustrated that ShadowStory promoted creativity, collaboration, and intimacy with traditional culture among children, as well as interleaved children's digital and physical playing experience.