Who says raising money is hard these days? PlaySpan makes it look like child’s play. The startup, which was literally founded by a 5th grader, just raised $16.8 million in a series B round from existing investors Easton Capital Group, Menlo Ventures, Novel TMT Ventures, and STIC.
PlaySpan was founded two years ago by Arjun Mehta, then in the 5th grade, and his father Karl Mehta, who is the CEO. It is a marketplace and micro-transaction payment system for virtual goods in more than 200 different video games. So far this year, more than $50 million worth of transactions have gone through PlaySpan, and the company has reaped revenues in the millions of dollars.
The company also sells the Ultimate Game Card through 20,000 retailers, including 7-Eleven, Wal-Mart, Blockbuster, and Rite-Aid. With the stored-value card, players can purchase virtual goods in hundreds more video games, including Everquest, Eve Online, and all EA Games.
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ridic
wow
Thanks for the self-esteem boost Erick.
This is quite impressive. Although this is of no use to me, I really admire their startup.
are those just paybycash stats? pretty sure playspan used to focus on secondary market transactions.
wow! gamers have money to spend, and they must be spending fast and frequent. The Ultimate Game Card is a product of paybycash? I do have that impression.
What a great story. I wonder why the game companies themselves haven’t provided marketplaces for their own virtual goods?
Well they do to an extent, but gamers are very hot & cold on this issue.
One group falls into the idea that it is cheating to introduce an external influence to modify the game experience, whereas the other just happily types in their credit card info.
I imagine as the MMO world matures, you’ll see this become the norm for game developers.
Besides, it’s all fun & games until the IRS taxes you on that virtual magic sword.
Sony Online Entertainment did exactly that with Station Exchange. It provided a secure, verifiable transaction platform that enabled users to buy, sell and trade virtual goods within EverQuest II. Since the launch years ago, it has licensed the virtual goods platform to LiveGamer, but SOE was the first major publisher/developer that officially supported this business model. Until then, shady grey markets were created on eBay and IGE, etc. etc and were unreliable or riddled with fraud.
The reason why the game companies don’t provide the marketplace is that it’ll be asking for an IRS audit.
The game companies see the goods worth absolutely nothing. If they set up a marketplace, they are saying the goods are actually worth something, which means they are generating revenue and they must pay tax. And you have to realize, not everyone sells goods, yes a lot do. But, if the game companies starts putting values to goods, then EVERY ITEM in the game must be taxed.
I’m not saying that gaming companies shouldn’t put a value on the goods, but the consequence so far has detracted them from doing so. And the IRS audit on their entire server will probably be a B*****. And if they put a value now, they have to pay taxes for items from previous years also.
“On November 1, 2007, President Bush signed the “Internet Tax Freedom Act Amendment Acts of 2007″ into law. It extends the prohibitions against multiple and discriminatory taxes on electronic commerce until November 1, 2014.”
http://en.wikipedia.org/wiki/I.....nation_Act
@dan — Educate yourself before writing a comment…
This was tried with virtual currency from the same games but the gaming companies blocked it……….could this go the same way eventually ?
Hell what’s going on today! Government is trying to bail out CitiBank, those companies raise so much money for so many unproven, irrealistic ideas. God.
some background information. I guess game companies now finally take it serious.
http://www.wired.com/gaming/vi.....ntPage=all
Congrats, Karl
$50 million in transactions? I signed up out of curiousity and I’ve never even heard of any of these games. Are they going to support Warcraft or any of the major MMOs?
I think gamers buy gold and other assets all the time and say they don’t OR don’t want to admit to it in front of their friends in the game. Publishers are just PO’d because they are not making money off of trading. The market demand for this stuff is not going away. Time to wake up!
Don’t be too impressed. Despite this influx of cash the company started laying off people last week in the PayByCash offices. One office lost 40% of its people. No creative measures to prevent layoffs were contemplated or offered–they just hacked, hacked hacked. To add insult to injury the company canceled insurance benefits for those laid off the same day–not even bothering the exercise the standard of keeping benefits until the end of the month. Money does not buy stability, good sense, or a conscience.
I can’t imagine PlaySpan staying in buisness. I signed up for an account, and used their system to earn points by checking advertisements with their partners, earned 3000 points, and when I went to redeem the points they wouldn’t let me redeem the points and wouldn’t tell me why.
This was the exact message:
”
This email is to inform you that your recent order (ORDER ID
002-073510-04207359-039) for EVE - 30 Day Starter Pack has been cancelled
prior completion. Your account has not been charged.
“As mentioned on our site, PlaySpan takes your security and safety as a top priority. We have established a number of rules, supporting processes and system constraints that allow us to filter user behavior, account activity and fraudulent charges. Your recent order activity was highlighted in a number of rules, and as a course of business, your order was cancelled.”
I asked them about what was going on and they wouldn’t tell me anything. They said:
“Unfortunately, we cannot be specific at this time about the security procedures and policies we have in place that are affecting your orders.
In order to continue with your purchases, you will need to use our alternate payment method of PayByCash.”
In other words, they got paid by their advertisers more than 30.00 worth and now they want me to pay them cash in addition.
My account with them is less than 12 hours old and I gave them no credit card information. So I think they are running a scam.
so true i mean same here i try to earn points but i cant, it wont even let me register a new acc? i beleive this site is gonna crash they have some serious maintaining to do.
well im trying to earn points but it seems i cant everytime i click earn nothing happens but over all the site is cool
playspan marketplace stopped workijng? it gives me a shittload of crap
lol, I think the site is a scam.
Basically, I sign up, get the 100 points, use it to buy something, and it just stays on: Order Status: On Hold.
And under the transactions, it says the activity, and right next to my order it says “Expired” even though it has only been ordered for like 5 mins.
Unless someone proves me wrong, I’m not using the site.
Millions of dollars in revenue my ass. If that’s true, it’s from PayByCash, not PlaySpan. Their model is bogus. What real games with any volume have they enlisted? None. Not to mention the depression we’re in… good luck playspan. Gonna be PlayDead pretty soon… lol