Neil Young, the CEO of iPhone game startup ngmoco, wants to “amass enough scale” to accelerate “away from the pack.” He just raised a $25 million series C round and acquired Freeverse, another top iPhone game developer, to help ngmoco keep moving forward. The round was led by Institutional Venture Partners, and existing shareholders Kleiner Perkins, Norwest Venture Parters, and Maples Investments also participated. The new round brings the total raised to $40.6 million.
The startup consistently pumps out new iPhone games which have been downloaded millions of times. Two of its games alone—TouchPets and Eliminate—have been installed 9 million times, and hundreds of thousands of people play every day. Last year, ngmoco switched to free-to-play games with in-app purchases for virtual goods through its Plus+ social game network.
All of Freeverse’s games, such as Skee-Ball, Flick Fishing, Flick Bowling, and Moto Chaser, are paid apps. Skee-Ball is the No. 4 ranked paid app in the App Store. But Young plans to move the Freeverse games over to the free-to-play model, and then make money off in-app purchases. Young also acquired the $0.99 game Charadium from another game developer and plans to convert that over to free-to-play as well.
The model is working well for ngmoco. Young says TouchPets had “its biggest revenue day” last weekend, and its next two games, We Rule and GodFinger (a “social god game”), were designed specifically with the free-to-play model in mind. “On any given day, you have about 2% of your audience paying you money,” he says. He expects ngmoco to put out about about 20 new games this year, and the newly-acquired Freeverse team to nearly match that.
In addition to rolling out wave after wave of new iPhone games, Young also plans to open up an SDK to ngmoco’s Plus+ system so that other developers can more easily tap into it. The Plus+ system can manage virtual goods payments, player-to-player messaging, and other social aspects of iPhone games.