Ok this is getting… embarrasing?
Earlier we covered Elementeo, a startup that is run by 13-year olds (and effectively at that).
Now TechCrunch reports about PlaySpan, a startup that was founded by a 6th grader Arjun Mehta. According to the official website:
PlaySpan started in ArjunÃ¢â‚¬â„¢s garage in Silicon Valley in 2006 and was
incorporated with ArjunÃ¢â‚¬â„¢s earnings from selling online game items won
from quests he fought while attending 5th grade at Challenger School in
One of the reasons for this investment, however, is that they have a real business model based on experience about a niche.
PlaySpan is building a “commerce” platform for virtual items that can be integrated into MMOG games or Virtual Worlds, thus allowing those games to offering bartering and commerce engines in the games themselves. Other companies in this space include Multiverse
This is quite smart if you think about it….
The development costs of a traditional MMOG game can range upwards of $25-45MM depending on the scope of the project — this is a massive expense for something like a game in particular because the uptake or success of a game has many subjective and non-quantifiable variables.
But every one of those games requires a commerce engine. These engines, on the other hand, have no influence or relation to whether or not a game is successful. The engine wouldn’t help differentiating that game among competitors, but there is sufficient demand that it is required.
So if you were a game development company building such an ambitious project, the best thing for you would be to just get a COTS commerce engine that you can plug in without wasting the time, effort and focus of your development staff.
The value point for customers for such an engine is the % of the $25-45MM that would have been otherwise spent building such an engine ($1M? $2?) — that’s still a very lucrative value-point.
However, if PlaySpan amortizes this value-point and charges as a % of each transaction (which it is very likely to do) then it would stand to earn a lot more than that in the long-term (for reference, SecondLife estimates that U.S. $887,117 were spent in the last 24 hours in that environment).
So PlaySpan addresses a valuable market — adding that to the fact that they have been able to build an alpha level version of the platform in 1 year shows an ability to execute as well.
The investment was thus justified.
Its still kindof embarrasing for the rest of us, isn’t it?