Newsflash: the worse the economic situation, the more people play video games. It’s cheaper to stay at home and play Super Mario than to go out for a movie these days. According to a recent article by the New York Times, Video Game sales were up 18% in October, reaching $1.3 billion. There are many business models for the gaming industry and Playce chose one that is very unique. See the highlights of my conversation with Yoram Avidan, CEO of San Francisco/Israel based Playce and Carmel Gerber, VP of business development.
VC Cafe: Your slogan is “Making the World a Playground” – what is Playce exactly?
Yoram Avidan: Playce started as a broad base mirror world, consisting of imagery and geography – based on the technology that I developed in the past few years. We develop an API that enables game developers to create gaming content in the social gaming and high end core games space, similar to world of Warcraft and Halo.
Playce: Playce enables creation of synchronous social games, with high-end game-play and graphics, easily linking to social network friends and IM buddy lists. Unlike casual gaming which are mostly 2D flash based games (Oberon, Kongregate, pogo), we provide an API to create games that are completely 3D – the player can walk around in a virtual city like Paris, but rather that just looking at the Eiffel tower as an object he can go up and look at the city below. It’s a bit similar in the sense that the game experience will not require a download, and each individual game lasts about 5 minutes.
VC Cafe: What’s the technology behind the Playce API? Is it mapping or video?
Playce: Our core technology is optimized streaming, you are able to stream without a download. It’s a graphic engine embedded in the browser. The streaming engine enables us to pass 3-4TB of specific data that doesn’t require a download, same as Google earth. The game developer API enables access to 3D world, which includes lots of available tools already built in on the platform. The majority of the games are developed in C++ but we’re working on releasing our own scripting language, that won’t require coding experience.
VC Cafe: Sounds interesting. What kind of tools do game developers get access to using the Playce API?
Playce: We provide security, game analytics, micro-payments (through integrations with micro-payments companies), AI engine and in-game advertising. From the game developer’s point of view Playce is a one stop solution. It’s also open, so game developers can modify it. You’re getting the baseline as a good starting point.
VC Cafe: So you are offering this great tool to create games – what is your business model?
Playce: Business model – we monetize through advertising and virtual goods (Carmel reminds me that it was an industry of $1.2 billion in 2007 and it’s projected to reach $6B by 2010). We’re building an independent destination site with community features in addition to the game-infrastructure-as-a-service (GIAAS) we provide the virtual world to a game developer and in the back-end we do hosting, security, registration, monetization strategy… a lot of these independent game developers are too small to do it all themselves, but they can use the API and start developing the product right away.
VC Cafe: What would be the revenue share with the game developers? What’s in it for them?
Playce: We’re still discussing the exact numbers, but if you look across the industry, companies like Oberon and Congregate offer a 70:30 split. Everything that we’re offering would save developers 60%-70% of the development cost. We’re helping them get to market faster. We can also let them create sequels.
VC Cafe: I’m assuming that it takes a while to build a virtual city. What’s available right now for them to use?
Playce: Right now we have 2 cities: part of LA and far east but we’re constantly working on adding more. (look at the techcrunch 50 demo):
VC Cafe: Playce can be as great as the developers who adopt this technology. How do you plan to recruit developers?
Playce: We recruit new developers in different ways:
– Gaming conferences and competitions like GDC (Game Developers Conference). TC50 was also really exciting. We got a lot of inbound inquires.
– Our very own Stuart Bonn, the VP of production is a former EA studios executive so we have a pretty extensive network
– Word of mouth
VC Cafe: What’s your funding situation? Are you looking to raise?
Playce: we raised money from an Israeli angel, who founded one of the largest Israeli software companies. We’re always happy to learn about funding opportunities but we haven’t started looking yet.
VC Cafe: Do you have any major competition? Is anyone else providing a gaming API?
Playce: there are a few startup companies that deal with virtual worlds for games (see: metaplace) they make small virtual world islands for games. We’re creating big destinations, rather than a level in a game- it’s like combining Google Earth and Playstation.
VC Cafe: You mentioned PLaystation – can the API be used to develop games for the Xbox or PS3?
Playce: Right now it’s just windows application (you can’t run it on mac or a game console). In the future, you will be able to develop to playstation and Xbox – we believe that the performance will be even higher than a regular PC. For now however, we selected to start in a windows base.
VC Cafe: Finally, what are the main challenges that you forsee for Playce looking forward?
Playce: Right now we’re focusing on releasing the first game, and making it really fun. Next stage will be game developer acquisitions.
Do you know any game developers who might be interested? What advice would you give to the CEO of Playce? Leave a comment and let us know!