BigDoor Raises $5M Led by Foundry Group, Looks to Bring Game Mechanics to All the Web

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in a company statement. That statement has some extra oomph when you consider that Feld is an early investor in (and board member of) Zynga, the high-flying social gaming company in San Francisco that is a poster child for making money through virtual currencies and related schemes.

Seattle entrepreneur and investor Andy Sack, an existing board member of BigDoor (he also just announced a big new project yesterday), added in a statement, “Game mechanics are taking over the digital world. Foundry sits at the epicenter of this world and this investment is a huge stamp of approval for BigDoor’s platform.” Sack and Feld have known each other for many years; it was Sack who helped get Foundry Group interested in investing in BigDoor.

Founded last year, BigDoor started out by helping Web publishers make money from existing virtual currency and “offer” systems. But most websites still needed to build those systems, so BigDoor quickly discovered “there was a much bigger opportunity by building the platform that powers game mechanics and virtual economies,” Smith says. The company’s new platform went live in February.

Lest anyone think this trend is turning consumers into reward-seeking zombies for no good reason, real money is getting made, in a couple of ways. Virtual currency “really increases virality” of a site, Smith says. That means consumers will tell their friends about it and compete with them to earn points. “That will drive profits for publishers. The other way is, virtual currency leads to direct user monetization,” he says. “The publisher can sell virtual currency, which lets the user see premium content.”

Meanwhile, BigDoor makes money once a certain number of people use its platform on a given site. It also takes a fee on each purchase or transaction on the platform.

But is there really enough demand for this kind of service? “Anyplace where [an online] community exists, there is a real need to differentiate amongst that community, and reward that community,” Smith says. Most publishers think of consumers in terms of those who will pay, and those to show advertisements to, he says. But they have been neglecting two other groups—those who contribute content, comments, or ratings, and evangelists, the people who tweet and retweet articles and share content from their favorite sites across their social networks.

Not surprisingly, Smith is bullish on the whole gamification trend. “Our prediction is that by the end of 2012, half of all sites and apps will use some form of game mechanics,” he says. “That’s where we see the world going.”

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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