The grey market for virtual goods has grown so large China has moved to tax the trade, but Valley-based startup Playspan wants to take it above ground. The company says it’s raised $16.8 million dollars in a Series B round from investors including Easton Capital Group, Menlo Ventures, Novel TMT Ventures, and STIC to make it happen.
Playspan’s idea: Create a hub where online game players can buy virtual goods — like a snazzy shirt for your game avatar, or a +6 two-handed sword of dragonslaying — for real cash. The company already works with more than 50 titles, and Playspan CEO Karl Mehta said he processed more than 50 million transactions in the past 12 months.
A lot of gaming companies despise the virtual goods traders, fearing trading game assets for real currency can disrupt a game’s internal system of rewards and favour the player who can afford to simply buy the best character/strongest armour/toughest spaceship. Playspan’s Karl thinks more companies will come around to realising the practice can’t be stopped and choose to get in on the game. “We say to the publishers our mission in life is also to kill off the gold farmers, but we’ll let you keep a piece of the revenue,” he said.
The plan for Playspan’s new funds? More marketing. Karl says Playspan has been mostly focused on North America so far, and he’s looking for growth in Europe and Asia.
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