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Ngmoco raises $25 million, buys Freeverse

Well funded startup gets old skool Mac publisher
Ngmoco raises $25 million, buys Freeverse

As big plays go, ngmoco's raising of a further $25 million in its third round of VC funding - taking its total to $40.6 million - is fairly impressive.

Of course, you have to do something with the cash, and so it is that the San Francisco iPhone publisher has bought New York iPhone publisher Freeverse.

It also picked up the rights to online multiplayer pictionary game Charadium.

The purchase price of the deal wasn't announced but given that Freeverse has just announced five million paid downloads - more than ngmoco has managed, although with the majority at 99c - you'd have to imagine a reasonable chunk of the cash has been eaten up.

Personally, I'd be surprised if ngmoco got any change out of $10 million, although presumably there will also be various longterm incentives, in terms of cash and shares, built into the deal for Freeverse's owners, brothers Colin and Ian Lynch Smith, and any other shareholders.

Opposites attract?

What's perhaps more interesting to speculate about is how the two companies will work together.

For one thing, they have different cultures with Freeverse being a family-run longterm (since 1994) Apple developer and publisher, while ngmoco was founded by high powered executives from EA in July 2008.

Of course, their geographical separation means they could continue to operate as separate concerns.

From paid to free

However ngmoco's conversion to the freemium model - something that's seen the cancellation of some of its to-be published games and the redesign of others - strongly suggests that Freeverse's more standard model of paid for success will be changed too.

Indeed, TechCrunch says ngmoco CEO Neil Young will be moving Freeverse's games over to the freemium model, something it will also do with Charadium.

That will be a task given the current commercial success of games such as million-seller Skee-Ball, although Freeverse's other million-seller, Flick Fishing, while a paid app, does already support in-app purchases.

As part of the new deal, Techcrunch says both companies will be ramping up their release schedules with around 20 releases each reportedly planned for 2010.

Incidentally, both companies already use ngmoco's Plus+ social games networking technology; something that the cash injection will also support with a more open SDK for thirdparties to use.

Certainly, the combined companies' future success (or failure) will be a bellwether in terms of how well the freemium model scales on iPhone; something successful Facebook freemium publishers such as Playfish seem yet to be convinced about.

New investors Institutional Venture Partners, and existing ngmoco shareholders Kleiner Perkins, Norwest Venture Parters, and Maples Investments, who also put up more money, are obviously more confident.

[source: TechCrunch]