PlaySpan launches game e-commerce and payments platform as a service

PlaySpan is turning itself into a one-stop shop for e-commerce and payments for online games, social networks, and video sites.

Today, the company is introducing its “monetization as a service” platform. The service is a web-based platform that combines seven features into a single service that promises customers it will reduce costs, increase revenues and offer new features for users, said Karl Mehta, chief executive of Santa Clara, Calif.-based PlaySpan, in an interview.

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The service shows that the software-as-a-service trend — which started with enterprise companies such as Salesforce.com — can be extended to the business of providing services for online games. PlaySpan’s various technologies, such as providing virtual currency for games or prepaid gaming cards, have become very popular with game publishers who are trying to adapt to free-to-play online game business models. The service essentially makes it easier to make money in online games.

In such games, users play for free but pay real money for virtual goods. PlaySpan wants to offload a bunch of work from the game publishers, providing services that are not related to the core job of designing a great game but are critical to making money from it.

Executives can use PlaySpan to tune their games in real time, figuring out how to raise average revenues from paying users and get more non-paying customers to pay. It’s worth paying attention to how games are monetized. A one-percent increase in conversion of non-paying customers to paying customers can result in a 25 percent increase in revenue. Similarly, reducing the rate of credit card fraud can yield big profits.

What’s different now is that game publishers should be able to implement features such as a virtual goods store, a payment system that works around the world, anti-fraud systems, and other features that online games need in just a matter of days. PlaySpan doesn’t have to babysit the customers as they implement it manually over a period of weeks. Rather, the process is automatic. Customers can login to a web service and just get it all done. CEOs and game designers alike can use the dashboard to see how their games or videos are doing at any given moment.

Mehta said that PlaySpan spent the better part of a year pulling together the monetization-as-a-service platform, as it integrated various properties it had acquired over time. The illustration shows that there are seven services stacked into the overall service. Ana Gonzalez, payments and fraud manager at game maker Atlus USA, said that she can now work with a single platform as a customer of PlaySpan. In the past, she had to use 15 different platforms. Moreover, the PlaySpan system was implemented in less than three weeks.

PlaySpan has more than 160 employees and has raised $42 million in funding to date, including an $18 million round in August. Investors include Easton Capital, Menlo Ventures, STIC, SoftBank, Vodafone, and Novel TMT Ventures. PlaySpan has more than 1,000 customers and it is adding 100 new ones per week. Rivals include Live Gamer and Digital River.