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Evolve 2010: ngmoco's Neil Young on a $403 million rollercoaster: Think big and don't be a pussy

But remember you can't buck the market

Evolve 2010: ngmoco's Neil Young on a $403 million rollercoaster: Think big and don't be a pussy

In the second keynote talk of the Develop Evolve conference, ngmoco CEO and Neil Young provided a detailed breakdown of the lifespan to-date of the company he took, with three other founders, from birth to its recent headline $403 million purchase by Japanese outfit DeNA.

Entitled, 'How we started, what we've learned & what's next...', Young stressed the importance of vision and company culture, while also highlighting the two significant decisions - or pivots - that defined ngmoco's success.

Inflexion point

"Pivots are events where you have to throw away everything except your knowledge to target a new and better opportunity," Young explained.

Ngmoco's first was the company's realisation that despite having raised $15 million of investment, its original business model of releasing paid games for iPhone wouldn't enable it to fulfill its vision.

"We worked out that even if we had two for the top 5 games on the App Store all year, we'd only be making $10 million annually," he said. "We couldn't build a significant company on that basis."

The result was the company killed all but two of its projects and acquired a social developer, Miraphonic, to learn about the emerging free-to-play market.

"It scared the investors and the staff. It was a radical move," Young explained, especially as the company had completed its second funding round a couple of months previously.

"But we decoupled our revenue from chart position. Now we monetise usage instead of downloads, which has enabled us to unlock multiple revenue streams, and the valuation of the company grew ten fold."

The end of the beginning

As significant was the second pivot, which was to build out its Plus+ social platform in a much more aggressive and comprehensive manner - something that resulted in the company's sale to Japanese mobile platform outfit DeNA.

"For us, the sale was part of the pivot. It's not the end of ngmoco. It's not an exit," Young explained, also adding that the company had received other interesting offers.

"Combined with DeNA, ngmoco can create the global leading social gaming platform, and a company worth tens of billions of dollars."

It's a strong statement, but one that chimes with his oft stated vision of creating an Electronic Arts for mobile games.

Indeed, DeNA CEO Tomoko Namba shares it; albeit with a cultural twist. "I want to build a company more valuable than Nintendo," she told Young.

The big bet

As for the founding of the company, Young and co-founder Bob Stevenson received three pieces of sage advice from Stevenson's 65-year-old father: think big; don't be a pussy - make the bet on yourself; and burn your boats, which in Young's case resulted in him resigning from EA and setting up a brand new outfit, ngmoco.

"I didn't like mobile games or the mobile games business," Young recalled.

"That all changed with the launch of iPhone and the App Store. It provided a discontinuous change in the mobile games business. It was an incredible opportunity and luckily I was able to build a business from that inflexion point."

And post-acquisition, he remains as enthusiastic as ever about the sector's potential.

"Mobile is the future of entertainment," he stated.

"By 2013, there will be one billion iOS devices, and mobile OSes are coming to tablets and internet TV too. Our goal is establish new frameworks around these new audiences."


Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.