Gamesville.com Wins Big in $14M Round

As television and the personal computer continue to converge, the game show may be the programming genre that most clearly integrates elements from each medium. Clearly, interactivity lends itself to Jeopardy more than 60 Minutes or Sabrina, The Teenage Witch.

Gamesville.com Inc., an independent producer and distributor of online game shows, earlier this month received more than $14 million in its first institutional round of venture financing.

“We put the activity into interactivity,” said Chief Executive Steve Kane. “We pull elements out of television and put them on the Web.”

Flatiron Partners of New York led the Series A financing in the Boston-based company. Other first-round investors include Softbank Technology Ventures, Highland Capital Partners and General Catalyst Internet Partners.

Gamesville was founded in 1995 as a database marketing company. Kane chose to produce a game show format because of the programming genre’s ability to attract and retain users. A recent study by Internet-usage research firm Media Matrix shows interactive games as the second most popular activity associated with personal computers.

“We wanted to take advantage of the organic desire of playing low-bandwidth games,” Kane said.

Gamesville has more than 1.4 million registered users. The company owns the intellectual rights to all the games and will likely syndicate properties to other Web sites, Kane said.

“When given a choice,” said Flatiron Managing Partner Jerry Colonna, “I back companies whose mission is to monetize first rather than build traffic [first] then monetize.”

Proceeds from the investment will go to sales and marketing through a combination of online and offline media campaigns as well as to hire additional staff. Kane said Gamesville, which currently has 26 employees, will likely triple its staff by the end of the year.

Kane identified the online game shows of the Sony Corp. as Gamesville’s primary competitor. Through Sony’s ownership of Columbia Tri-Star studios, the company holds exclusive Internet distribution rights to highly rated television game shows like Jeopardy and The Wheel of Fortune. Gamesville’s motto is “wasting your time since 1996.”

“Games of skill don’t work on the Internet because there is always a genius out there who will know all the answers,” said Highland General Partner Dan Nova.

Nova identified games of chance, such as Solitaire, as more conducive to the Web.

As part of the deal, Colonna, Softbank General Partner Charlie Lax, and General Catalyst Managing Directors Brian Bedol and David Fialkow have joined Gamesville’s board. Nova will received and observer position. Kane would not comment on future financing plans.