Today iPhone game development start-up Ngmoco announced that it had raised a second round of $10 million in venture funding. The round is lead by Northwest Venture Partners with participation from previous investors Kleiner Perkins and Maples Investments. Although the company is only nine months old, the funding round was put together in "a matter of weeks" according to reporting at Venture Beat.
The announcement comes shortly after Ngmoco played a significant on-stage role in last week's Apple iPhone 3.0 OS conference that announced In-App Payments. Ngmoco demonstrated two new titles that would incorporate In-App Payments, LiveFire and Touch Pets, for purchase of in-game virtual goods. Right now Ngmoco has a catalog of seven titles available for iPhone, five of which are top 10 sellers. The company plans to release "one or two" new games per month in the coming year.
The company was founded last July by former Electronic Arts executive Neil Young, with a $5 million round of venture capital from Kleiner Perkins and Maples Investments. Young has not stated publicly whether Ngmoco is profitable yet. That said, Ngmoco is currently a clear leader in iPhone game development and publishing thanks to titles like the critically-acclaimed Rolando.
Currently Ngmoco's games retail for $9.99 apiece, but falling iPhone app prices and changing models make drops likely in the future. It is perhaps in anticipation of this that Ngmoco is making a commitment to the virtual goods model with use of In App Payments in Touch Pets and LiveFire. As the free-to-play model famously shows, virtual goods support can allow publishers to lower initial price point and still profit thanks to higher numbers of users and significant post-purchase revenue streams.
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