It may be better to play with money than invest it in this Recession. PlaySpan is following this idea by announcing today that it has raised $18 million from Vodaphone and SoftBank. These funds are to be used for the company’s virtual good and monetisation platform. The company plans on using the funds to expand their product, sales, and marketing.
A month ago, PlaySpan introduced a method of payment through micro-transactions. With today’s funding, that brings PlaySpan’s total funds raised to $42 million. Existing investors include Menlo Ventures, Novel TMT Ventures, and STIC. Mehta, CEO of PlaySpan, said, “There is a lot of growth in our business in both domestic and international markets.” Thousands use PlaySpan for its various tools for making money from virtual goods.
PlaySpan has many layers to its business. Game publishers are more apt to use the free to play model. Users now play for free but must spend real money for virtual goods, such as weapons. PlaySpan offers a platform for virtual currency and goods. It is the developer, not PlaySpan, who create the infrastructure.
Another layer is the UltimatePay payment system. PlaySpan allows companies to make money off of their goods. It is nothing more than marketplace for goods, except in virtual reality.
PlaySpan also offers gift cards in 48,000 retail stores for those without credit cards to purchase more virtual goods. The user then enters the code into the game and receives virtual currency.
The impact of such strategies has been fueled by the recession. The pioneering of micro-transactions in Asia is driving many gamers into this system. PlaySpan now has 150 employees. The company also provides fraud protection, merchandising, and promotion to gaming companies.
The business model works now, but how long can it hold out? PlaySpan has seen a 100 percent rise in business over the past three years during the global recession. Still, the model may not hold once the recession ends. Developers may simply create their own platforms with PlaySpan.
Yet, 50 million users are using the Ultimate game Card at PlaySpan’s own marketplace. The Ultimate game Card is being used in 180 countries to purchase virtual goods. Inside Network believes that virtual goods with grow to $1.6 billion in revenue in 2010. That’s a lot of money for a business thriving on virtual reality. It seems then that PlaySpan’s business model may be recession proof after all.
