Playcast raises $10 mil in expansion bid

Funding to be used for rollout of services to telcom, cable providers

Venture capitalists are doubling down on cloud gaming.

Playcast, a service that hopes to offer up high-end videogames to consumers via their TVs without needing a console, has raised $10 million in a Series B round of funding to help it expand its ongoing rollout of services to telcos and cable TV providers.

MK Capital, a venture fund that specializes in digital media whose partners include former Sony Pictures topper Yair Landau, and JVP, an Israeli venture capital firm focused on media, technology and content, led the round.

Playcast previously raised $2 million in funding in 2009.As opposed to rival service OnLive, which recently struck a deal for its service to be embedded in 2011 Vizio TVs, Playcast is approaching cloud gaming as a service that can be integrated into existing set-top boxes and telecommunications technology.

Playcast will not initially chase the “cord cutting” market, opting instead to provide the service directly through cable providers.

And rather than tackling the U.S. market initially, Playcast has decided to focus on overseas markets where console penetration is low. It hopes this strategy will result in a larger initial user base. Presently, the company operates solely in Portugal. It plans to announce an Asian partner soon, followed by two other Western European markets.

Like OnLive, Playcast takes advantage of cloud computing to deliver titles to consumers. Games are stored and played on its centralized servers and pushed to users via a broadband connection. When players press a button on their controller at home, that action is transmitted virtually instantaneously to the game and reflected onscreen, meaning that virtually any screen with a decent Internet connection can be transformed into a high-end gaming system.

Several major videogame publishers are already onboard with the company. Activision, THQ, Disney, Konami and Warner Bros. are among the bigger companies to sign partnership agreements.

“To be honest the world is pretty big, and there’s a lot of work to be done,” said Playcast CEO Guy de Beer. “With North America, the timing isn’t right for us right now.”

The funding will be spent on expanding distribution agreements with existing partners and signing new ones. The company also plans to update its user interface to a broader audience.

“Our vision is to help the company drive and improve the service,” said Landau, who joins Playcast’s board as part of the investment. “We’re launching it in a smaller market to get our feet wet and refine it before we launch in a bigger market.”

Landau served as vice chairman of Sony Pictures Entertainment and was founder and president of Sony Pictures Digital (which included game arm Sony Online Entertainment).