Sixth Grade Game Programmer Nets $6.5 Million In Funding

Venture capitalists bet large on the future of Arjun Mehta's system for selling virtual goods in games.

Thomas Claburn, Editor at Large, Enterprise Mobility

September 20, 2007

2 Min Read

Start with a Silicon Valley garage -- it worked for Google and HP. Add 6th grade programmer Arjun Mehta with a system for selling virtual goods in games and you get the archetypal startup story, with parents -- rather than public relations -- playing gatekeeper for a twist.

Add seven game publishers committed to be customers and $6.5 million in funding from Easton Capital, Menlo Ventures, STIC, and Novel TMT Ventures, and you get to try to keep your jaw from hitting the floor, assuming you believe Arjun, rather than his tech industry father Karl, co-founder and CEO of PlaySpan, is the driving force behind the company.

PlaySpan is based in Silicon Valley with offices in Mumbai and Shanghai. It counts 10 million gamers as future users of its technology. The company this month released an alpha version of its publisher-sponsored in-game e-commerce network.

"This investment is an exceptional endorsement for PlaySpan's pioneering role in building the first publisher-sponsored in-game commerce network and technology," said Arjun's father, Karl Mehta, in a statement. "It will help create a new class of revenue opportunities for publishers and will allow gamers to enjoy their game experience with commerce. We are extremely fortunate to have a complimentary group of global investors that bring solid experience in the gaming, Internet, and financial service industries."

Shawn Carolan, managing director of Menlo Park, Calif.-based Menlo Ventures justified the investment in a statement to the effect that in-game commerce and virtual economies were on the rise. "The whole online gaming market in general continues to grow pretty quickly," he said.

That's the hope anyway. The poster child for in-game commerce and virtual economies, Second Life, has been weathering an economic and public image downturn in the wake of a virtual bank scandal, controversial sexual content, and the disputed perception that the virtual world is virtually deserted.

PlaySpan said the in-game commerce market is worth $2 billion annually. Given that Linden Lab, according to the Associated Press, makes $5 million a year selling virtual currency created for Second Life, in-game commerce looks like easy money, if the demand is there.

Carolan expects PlaySpan's technology will help as more and more games offer free, instead of fee-based, access. "What's increasingly happening is companies are testing free to play and then upsell, where you're trying to monetize the players through other measures," he said.

About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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