Inside Social Games

Santa Clara, California – based PlaySpan, founded in 2006, has just raised $16.8 million via Easton Capital Group, Menlo Mentures, Novel TMT Ventures, STIC and others, VentureBeat reports. The company plans to use the money to build out its virtual goods payment platform and transaction system for online games.

Many new free-to-play games that have little or no advertisers or subscription are making their income by selling various items and in-game upgrades to players as they need them. The cost is generally very cheap, but since the cost is so low, the volume of those transactions adds up very quickly. The trick is, online games need to have the infrastructure in order to do this, and that is where PlaySpan comes into the picture.

When it comes to virtual goods in games, there are two types of markets: Primary market and Secondary market. The more “common” market seen online today is the secondary markets where players sell goods to other players for real currency. However, a number of these sellers operate without the game developer’s permission. These are generally prevalent in places like China and Korea and consist of services such as the sale of virtual gold in World of Warcraft.

The problem, as you can surmise, is that it leaves the developer out of the picture, and creates a lot of opportunity for fraud, theft, and a general breakdown of in game economy. Of course, that isn’t to say that all secondary markets are bad. There are in fact companies that do acquire permission and work with game developers to mediate player to player transactions (i.e. LiveGamer) without any of the negative drawbacks.

Similarly, PlaySpan operates with permissions from developers, but instead of moderating a secondary market, they choose to focus on a primary market in which items are sold directly to the players themselves. In order to best do so, PlaySpan focuses on the needs of a player and tailors items to them based on what they need most in game. This can be based on any number prospects such as level, in-game wealth, current quests, etc. Whenever the situation arises, a player receives a prompt with the offer and can purchase it immediately by whatever means they desire. For every purchase made, PlaySpan receives about 10%.

Their payment method is fairly simple too. By acquiring the online payment company, PayByCash, PlaySpan offers users use up to 70 different ways to make purchases in 180 different countries. This includes money orders, game cards, and even cash. They even have their own pre-paid game card now that is accepted by over 200 online games.

With such a robust infrastructure, PlaySpan has gotten the attention of a number of different companies now (Aeria Games, Eve Online, Gala-Net, etc) and serves as a platform for over 60 unique online games. This equates to over 70 million gamers world wide.

[via VentureBeat]