Ngmoco's CEO Neil Young took some time to speak with TouchArcade about their just-announced acquisition of Freeverse. The response to the acquisition in our comments and forums has been very lively both about the overall move as well as the adoption of the freemium model.

In the interview, we addressed their choice of Freeverse as a target, as well as their move into freemium content. The full audio recording is included in our podcast format, while a summary is transcribed here.

Addressing why they choose Freeverse, Young was very complimentary about the company and described them as "wonderful people" who shared their vision and values while also having a pool of talented people and intellectual properties that complemented Ngmoco. Freeverse will remain functionally independent and retain the Freeverse brand. According to Young, to the outside world, things won't look very different initially.

One hot topic amongst our readers is Ngmoco's recent move towards a freemium model -- where games are free to download and revenue is generated through in-app purchases. The reason for this move was a combination of factors according to Young. Despite the running speculation, the move was not in response to the high piracy rates on the iPhone.

Instead, there were two main factors. First, they felt that there was a large pool of App Store customers who only participated in the free-download side of the store that were not being captured in the traditional model. Young cited download numbers 10-20x higher for the top free apps compared to the paid apps. And, second, in looking into the future of the App Store, they saw a general trend away from higher priced premium games, and towards these type of games that can be played over time.

Interestingly, Young admits that the first incarnations of their freemium models for Eliminate Pro and Touch Pets Dogs were somewhat "clumsy" and "1.0" versions of the model (and to be followed by 2.0, 3.0 etc...). Part of this is attributed to the fact that neither game was originally conceived to be freemium. Young said, however, they have continued to learn and made ongoing adjustments to the model for their upcoming games including God Finger and We Rule, and beyond.

Finally, Young confirms that Freeverse's existing games including the upcoming Warp Gate won't be affected by the acquisition, but that future games will be designed around the freemium model.

We recommend listening to the entire interview yourself, which is included here.

Podcast music provided by Overclocked Remix.

Interview Audio: Subscribe in iTunes or Direct Download (M4A, 14.7MB)

  • TheFamousEccles

    I appreciate that they're actually trying to explain their pricing system now. Still, color me very skeptical about future efforts.

    On the plus side, their CEO being Neil Young is pretty sweet. Isn't James Brown also a dev somewhere?

    • The Theory

      all we need is some Crazy Horse to complete the awesomeness!

    • chris f

      fantastic, now they're really going to try to push this pay-to-play crap down our throats even more. everyone hates it. they are in some serious denial over there. they have made terrific games but ruined them with their crap pricing model, which pisses me off cause i really wanted to play them. i know theyre not successful cause ive been watching the top grossing apps and NONE of their 'freemium' apps have been in the top 100 for very long. the way i understand there are two scenarios, and both of them suck:
      1) you play for free and are crippled and/or limited in what you are able to do
      2) you pay to play ridiculous prices in order to play the game to its full potential
      both of these situations are a psychological mindfsuk, and either way you cant really enjoy it cause youre on a countdown timer. VERY frustrating.

      its actually pretty amazing how narrow-minded (im being very generous here) they are. for example, they could make a fortune off of the touch pets app if they made it completely playable from the start and just allowed people to buy their dog toys, yards, etc.. and especially buy toys for other peoples dogs and take advantage of peoples desire to pay for a gesture (thats how valentines day works). with the eliminate app they couldve made a ton of money and gotten tons of people playing by charging a modest upfront price, and then they couldve made-it-rain with all the money they would get from selling different maps and such.

      they are fighting an uphill psychological battle with this bs pricing plan which they are GOING to lose no matter how great the games are. they cant live off investment funding forever.

      young is clearly delusional, thanks a lot for ruining a potentially hugely successful part of the app store.

      • anonymous

        "its actually pretty amazing how narrow-minded (im being very generous here) they are"

        Maybe you're the narrow-minded one? Neil Young is no fool, he's been in the games industry for a very long time. He knows his stuff. If ngmoco are going full-force with this "freemium" business model, it's clearly making them money. More than a normal paid-for model. Otherwise, why would they be doing it? To screw themselves?

        Fact is, the toucharcade users make up a tiny minority of the 75-million iPhone/iPod touch users. Most people probably like this freemium model.

        Also, I've seen a lot of people rip on ngmoco for being "greedy." I find this odd. Why are *they* the greedy ones? Aren't we the greedy ones? Aren't we the ones who demand commercial-quality videogames at bottom-of-the-barrel prices? The quality of games ngmoco puts out should be selling for $20 *easily*. Yet, we rip on anything priced over $5. Oh sure, there are a bunch of comments going "I'd by [whatever] for $10" now, but I remember when Rolando came out (great game) and people *refused* to pay $10. They had to drop the price to sell a meaningful number of units.

        ngmoco aren't the greedy ones. We are. Now we're paying for it.

      • chris f

        i totally agree. id pay $20 for eliminate pro even though im not a big gamer, that is, if i would actually be able to play it. they deserve money for thier good games; their pricing scheme, however, is nothing short of retarded. and theyre not making money, just look at the top grossing. no freemium games, and when they were there it was not for long, and they certainly werent at the top.

  • TheFamousEccles

    I appreciate that they're actually trying to explain their pricing system now. Still, color me very skeptical about future efforts.

    On the plus side, their CEO being Neil Young is pretty sweet. Isn't James Brown also a dev somewhere?

    • The Theory

      all we need is some Crazy Horse to complete the awesomeness!

    • chris f

      fantastic, now they're really going to try to push this pay-to-play crap down our throats even more. everyone hates it. they are in some serious denial over there. they have made terrific games but ruined them with their crap pricing model, which pisses me off cause i really wanted to play them. i know theyre not successful cause ive been watching the top grossing apps and NONE of their 'freemium' apps have been in the top 100 for very long. the way i understand there are two scenarios, and both of them suck:
      1) you play for free and are crippled and/or limited in what you are able to do
      2) you pay to play ridiculous prices in order to play the game to its full potential
      both of these situations are a psychological mindfsuk, and either way you cant really enjoy it cause youre on a countdown timer. VERY frustrating.

      its actually pretty amazing how narrow-minded (im being very generous here) they are. for example, they could make a fortune off of the touch pets app if they made it completely playable from the start and just allowed people to buy their dog toys, yards, etc.. and especially buy toys for other peoples dogs and take advantage of peoples desire to pay for a gesture (thats how valentines day works). with the eliminate app they couldve made a ton of money and gotten tons of people playing by charging a modest upfront price, and then they couldve made-it-rain with all the money they would get from selling different maps and such.

      they are fighting an uphill psychological battle with this bs pricing plan which they are GOING to lose no matter how great the games are. they cant live off investment funding forever.

      young is clearly delusional, thanks a lot for ruining a potentially hugely successful part of the app store.

      • anonymous

        "its actually pretty amazing how narrow-minded (im being very generous here) they are"

        Maybe you're the narrow-minded one? Neil Young is no fool, he's been in the games industry for a very long time. He knows his stuff. If ngmoco are going full-force with this "freemium" business model, it's clearly making them money. More than a normal paid-for model. Otherwise, why would they be doing it? To screw themselves?

        Fact is, the toucharcade users make up a tiny minority of the 75-million iPhone/iPod touch users. Most people probably like this freemium model.

        Also, I've seen a lot of people rip on ngmoco for being "greedy." I find this odd. Why are *they* the greedy ones? Aren't we the greedy ones? Aren't we the ones who demand commercial-quality videogames at bottom-of-the-barrel prices? The quality of games ngmoco puts out should be selling for $20 *easily*. Yet, we rip on anything priced over $5. Oh sure, there are a bunch of comments going "I'd by [whatever] for $10" now, but I remember when Rolando came out (great game) and people *refused* to pay $10. They had to drop the price to sell a meaningful number of units.

        ngmoco aren't the greedy ones. We are. Now we're paying for it.

      • chris f

        i totally agree. id pay $20 for eliminate pro even though im not a big gamer, that is, if i would actually be able to play it. they deserve money for thier good games; their pricing scheme, however, is nothing short of retarded. and theyre not making money, just look at the top grossing. no freemium games, and when they were there it was not for long, and they certainly werent at the top.

  • Gabrien

    Shocker: people will download a game more often when it's free.

    Solution: lets fool them into thinking it's free then fleece them once they're addicted.

    You know, I can't help thinking this business strategy rings a bell... Oh yeah, I heard there are some shady characters who do this at some parks and streetcorners... 'Dealers,' I think, is what they are called.

    • Mediocre

      'Dealers' in the parks and streetcorners try and sell you in-app purchases? What is the world coming too...

  • Gabrien

    Shocker: people will download a game more often when it's free.

    Solution: lets fool them into thinking it's free then fleece them once they're addicted.

    You know, I can't help thinking this business strategy rings a bell... Oh yeah, I heard there are some shady characters who do this at some parks and streetcorners... 'Dealers,' I think, is what they are called.

    • Mediocre

      'Dealers' in the parks and streetcorners try and sell you in-app purchases? What is the world coming too...

  • ultimo

    there it goes again

  • http://Brrrr ultimo

    there it goes again

  • Mediocre

    He looks just like the guy from Grandma's Boy. Funny because they were both in the video game line of work.

  • Mediocre

    He looks just like the guy from Grandma's Boy. Funny because they were both in the video game line of work.

  • dumas1000

    Competitive pricing. Those are the key words, my friends. As in Appstore customers/idevice owners are stubbornly and selfishly unwilling to submit to a competitive pricing structure, hence the development of gimmicky models such as ngmoco's freemium. PSP = 39.99 for a major release. DS = 34.99-29.99 for a major release. The iPhone = 9.99 For two days for a major release, then 6.99 for a month or two and then 4.99 for the rest of the year. The math here just does not compute. Not if you are a serious developer. It's no longer just about decs staying competitive within the AppStore marketplace. It's about staying competitive within the gaming industry marketplace. The newer idevice's are capable of producing games that are somewhere on the level of the DS and the PSP in terms of the specs and the technology. Eventually the prices will have to compete as well.

    • Jason

      It seems that you're only looking at the demand side of the equation. What is the most you have ever paid for a game on the App Store? I haven't seen one being sold for more than $9.99. As a developer, you are free to charge whatever you would like. If you're charging $30 for a game, when comparable games are available for $9.99 or less, you can expect rational consumers to buy at least three of the cheaper games instead of buying one of yours.

      Furthermore, it is significantly cheaper to port a game to the iPhone than to create it from scratch on the Nintendo DS. The title will have already proven itself to be successful. The story, design, graphics, music, and controls have already been worked out. There are no manufacturing costs associated with producing a physical cartridge or disc. There are no boxes or manuals to print. There are no transportation costs or licensing fees. Apple takes 30%, to be sure, but this is not a fixed cost that must be paid whether anybody buys your game or not, as is the case with the Nintendo DS.

    • spiffyone

      Direct comparisons to the PSP and DS price models, however, don't really hold water. For one, there are higher dev costs for those platforms due to the higher licensing fees. For another, those platforms, while now stepping into the digital distribution model, revolve around physical copies shipped to and sold in stores. That carries a higher cost, hence the higher cost of the games on PSP and DS.

      I will agree with the idea that market forces have driven already low iPhone/touch games, relying exclusively on digital distribution as the platform does, to too low prices. But, honestly...that isn't really the fault of the consumer; it's the fault of the early indie devs on the platform who felt the only way to compete with the bigger devs was to drop price, and some dropped way, way too low at launch. There wasn't an incremental model in place for such indie devs.

    • sid

      Well about the game pricing: you forgot that all other platforms have to be distributed, have to be advertised and you have to count the cost of the box and medium it comes on. These costs are way more than 50% game!!!

  • dumas1000

    Competitive pricing. Those are the key words, my friends. As in Appstore customers/idevice owners are stubbornly and selfishly unwilling to submit to a competitive pricing structure, hence the development of gimmicky models such as ngmoco's freemium. PSP = 39.99 for a major release. DS = 34.99-29.99 for a major release. The iPhone = 9.99 For two days for a major release, then 6.99 for a month or two and then 4.99 for the rest of the year. The math here just does not compute. Not if you are a serious developer. It's no longer just about decs staying competitive within the AppStore marketplace. It's about staying competitive within the gaming industry marketplace. The newer idevice's are capable of producing games that are somewhere on the level of the DS and the PSP in terms of the specs and the technology. Eventually the prices will have to compete as well.

    • Jason

      It seems that you're only looking at the demand side of the equation. What is the most you have ever paid for a game on the App Store? I haven't seen one being sold for more than $9.99. As a developer, you are free to charge whatever you would like. If you're charging $30 for a game, when comparable games are available for $9.99 or less, you can expect rational consumers to buy at least three of the cheaper games instead of buying one of yours.

      Furthermore, it is significantly cheaper to port a game to the iPhone than to create it from scratch on the Nintendo DS. The title will have already proven itself to be successful. The story, design, graphics, music, and controls have already been worked out. There are no manufacturing costs associated with producing a physical cartridge or disc. There are no boxes or manuals to print. There are no transportation costs or licensing fees. Apple takes 30%, to be sure, but this is not a fixed cost that must be paid whether anybody buys your game or not, as is the case with the Nintendo DS.

    • spiffyone

      Direct comparisons to the PSP and DS price models, however, don't really hold water. For one, there are higher dev costs for those platforms due to the higher licensing fees. For another, those platforms, while now stepping into the digital distribution model, revolve around physical copies shipped to and sold in stores. That carries a higher cost, hence the higher cost of the games on PSP and DS.

      I will agree with the idea that market forces have driven already low iPhone/touch games, relying exclusively on digital distribution as the platform does, to too low prices. But, honestly...that isn't really the fault of the consumer; it's the fault of the early indie devs on the platform who felt the only way to compete with the bigger devs was to drop price, and some dropped way, way too low at launch. There wasn't an incremental model in place for such indie devs.

    • sid

      Well about the game pricing: you forgot that all other platforms have to be distributed, have to be advertised and you have to count the cost of the box and medium it comes on. These costs are way more than 50% game!!!

  • Taragon

    I think this CEO has already demostrated his short comings by rushing the first two game out the door without fully understanding thier faults and has greatly hurt the company. Other games such as Maple Story have made large amounts of money using this model by only charging for none game changing enhancements not charging for basic game play. If they continue to charge to just play the game like in thier 'pet' game the model will fail and they will be out of this market.

  • http://IKEA Taragon

    I think this CEO has already demostrated his short comings by rushing the first two game out the door without fully understanding thier faults and has greatly hurt the company. Other games such as Maple Story have made large amounts of money using this model by only charging for none game changing enhancements not charging for basic game play. If they continue to charge to just play the game like in thier 'pet' game the model will fail and they will be out of this market.

  • ender

    I don't like the term "freemium" as that implies that the game is actually free. I prefer the term "unlockware" because you have to pay to unlock any worthwhile content, and often times that prices is much higher than if you simply had to pay for the game/app outright.

    • stainboy

      i'm with you on this, ender. "freemium" sounds good from a marketing standpoint, but let's you and i as consumers call it for what it really is, unlockware.

  • ender

    I don't like the term "freemium" as that implies that the game is actually free. I prefer the term "unlockware" because you have to pay to unlock any worthwhile content, and often times that prices is much higher than if you simply had to pay for the game/app outright.

    • stainboy

      i'm with you on this, ender. "freemium" sounds good from a marketing standpoint, but let's you and i as consumers call it for what it really is, unlockware.

  • Septimus

    Great, now you can ruin Freeverse games with your freemium model.

    I'd rather pay $10 to EA straight off than $20 over a few weeks just to complete a game or add something which just unlocks a bit that is already in it.

  • Septimus

    Great, now you can ruin Freeverse games with your freemium model.

    I'd rather pay $10 to EA straight off than $20 over a few weeks just to complete a game or add something which just unlocks a bit that is already in it.

  • oliath

    Now this is good. Makes more sense.

    For him to openly admit that BIG games like Elimitate and Touch Pets were clumsly is a very bold move and one that has won them back a great deal of my respect.

    Those two titles in my opinion could have been great paid games and were utterly ruined by the pay to play concept which left a very bitter taste in my mouth.

    If indeed ngmoco have learned from this and have moved on to better implementation then i am willing to give them another shot. What i cannot stand is a watered down product with pay to play implementation.
    I want a tangible product that i can invest in and keep and pay at my leisure.

    I DID actually buy points for eliminate just to support the idea but have nothing to show for it. At least if the paid part is extra maps, levels, costumes etc etc then you get something you can physically keep.... in a non physical digital kind of way.

  • oliath

    Now this is good. Makes more sense.

    For him to openly admit that BIG games like Elimitate and Touch Pets were clumsly is a very bold move and one that has won them back a great deal of my respect.

    Those two titles in my opinion could have been great paid games and were utterly ruined by the pay to play concept which left a very bitter taste in my mouth.

    If indeed ngmoco have learned from this and have moved on to better implementation then i am willing to give them another shot. What i cannot stand is a watered down product with pay to play implementation.
    I want a tangible product that i can invest in and keep and pay at my leisure.

    I DID actually buy points for eliminate just to support the idea but have nothing to show for it. At least if the paid part is extra maps, levels, costumes etc etc then you get something you can physically keep.... in a non physical digital kind of way.

  • macduke

    Thanks a lot, Neil Young! I had sworn off playing anything more from your stupid studio after you killed off Rolando 3 because you couldn't figure out a way to rape my wallet with it. Now I'm going to have to swear off Freeverse games too?!? What other studios are you going to buy and subsequently ruin? Gameloft? Firemint? Illusion Labs? I'm so pissed at you guys. Leave the App Store alone! Its fine the way it is. I want to be able to buy a game and not worry about having to throw more money at it to keep it maintained. Is that so hard to understand? Do you actually like playing your own games? Seriously!

  • macduke

    Thanks a lot, Neil Young! I had sworn off playing anything more from your stupid studio after you killed off Rolando 3 because you couldn't figure out a way to rape my wallet with it. Now I'm going to have to swear off Freeverse games too?!? What other studios are you going to buy and subsequently ruin? Gameloft? Firemint? Illusion Labs? I'm so pissed at you guys. Leave the App Store alone! Its fine the way it is. I want to be able to buy a game and not worry about having to throw more money at it to keep it maintained. Is that so hard to understand? Do you actually like playing your own games? Seriously!

  • Yog Shoggoth

    Looking at the Top Grossing chart, there's only two free titles in there (and they're not at the top) - one is a sexy app, and the other is Tap Tap Revenge 3.

    So unless I'm missing something, even under the shadow of piracy, the paid-for titles are still generating more income.

    Time will tell, but it does sound like Neil is putting a lot of eggs into one basket.

    • arn

      you're right! the guys that invested $25 million in them must have forgotten to look at the top grossing chart. :)

      arn

      • MidianGTX

        They can't be too bright considering the amount of disdain and hatred they've generated over the past year. They used to be sitting pretty in the hearts of the fans.

      • spiffyone

        Stranger things have happened in business, arn.

        That said, I think what ngmoco are doing is going for the potential to generate more revenue by leveraging the idea of "free" and getting people to pay to play.

        The problem I have with that model is that the majority of consumers who download free games on the app store don't buy games from the paid section, as Neil himself alluded. So it's really just hoping that a sizable enough portion of the consumers that go free will pay for the extra content. It's a bold move, sure, but will it work out better than just having a free lite version of a game and making the full game an in app purchase? And then having some additional content (for free or pay) down the road to lengthen the life of the title in a less artificial fashion.

  • Yog Shoggoth

    Looking at the Top Grossing chart, there's only two free titles in there (and they're not at the top) - one is a sexy app, and the other is Tap Tap Revenge 3.

    So unless I'm missing something, even under the shadow of piracy, the paid-for titles are still generating more income.

    Time will tell, but it does sound like Neil is putting a lot of eggs into one basket.

    • arn

      you're right! the guys that invested $25 million in them must have forgotten to look at the top grossing chart. :)

      arn

      • MidianGTX

        They can't be too bright considering the amount of disdain and hatred they've generated over the past year. They used to be sitting pretty in the hearts of the fans.

      • spiffyone

        Stranger things have happened in business, arn.

        That said, I think what ngmoco are doing is going for the potential to generate more revenue by leveraging the idea of "free" and getting people to pay to play.

        The problem I have with that model is that the majority of consumers who download free games on the app store don't buy games from the paid section, as Neil himself alluded. So it's really just hoping that a sizable enough portion of the consumers that go free will pay for the extra content. It's a bold move, sure, but will it work out better than just having a free lite version of a game and making the full game an in app purchase? And then having some additional content (for free or pay) down the road to lengthen the life of the title in a less artificial fashion.

  • Phillip

    Great even more games I won't have to download, play and waste my money for.

  • Phillip

    Great even more games I won't have to download, play and waste my money for.

  • Symbolist

    Nogomo.

  • Symbolist

    Nogomo.

  • http://www.ChronoSoft.com CommanderData

    I was hoping that Plus+ might gain some momentum, having all of Freeverse's games brought into the fold... now I worry that in the long term it will be seen as the network of "freemium" gaming. That could have a negative impact on any games using the network that want to adhere to a one-time payment model.

  • http://www.ChronoSoft.com CommanderData

    I was hoping that Plus+ might gain some momentum, having all of Freeverse's games brought into the fold... now I worry that in the long term it will be seen as the network of "freemium" gaming. That could have a negative impact on any games using the network that want to adhere to a one-time payment model.

  • Ben

    Dear Neil, please stop saying "you know".

    • http://www.gamesuncovered.com/ Palfince

      Got to agree with you there, it kept distracting me from what he was actually saying!

  • Ben

    Dear Neil, please stop saying "you know".

    • http://www.gamesuncovered.com/ Palfince

      Got to agree with you there, it kept distracting me from what he was actually saying!

  • Kevin

    I think Ngmoco should still at least give the option of paying $4.99 - $9.99 (depending on the game) to buy a "Freemium" game with all features unlocked. Those buyers could receive updates for free, while those who downloaded the free version would pay for new content.

  • Kevin

    I think Ngmoco should still at least give the option of paying $4.99 - $9.99 (depending on the game) to buy a "Freemium" game with all features unlocked. Those buyers could receive updates for free, while those who downloaded the free version would pay for new content.

  • http://ravensword.com AmazingRuss

    The word "freemium" makes me all stabby.

  • http://ravensword.com AmazingRuss

    The word "freemium" makes me all stabby.

  • rfore

    I love the freemium apps. You can get Eliminate for free and you never have to pay (unless you want to). The energy replenishes over time and ngmoco has so many special offers to get free energy that I never have to pay. I paid $9.99 when the app came out because the game was great and worth it. (It is what they would of priced it at). The only problem is the $30 in app option. If you spend $30 on an app then you should never have to pay another cent imo. Also they announced on facebook that "We Rule" has been submitted. Yay! They are my favorite game developers, well except for Tapulous.

    • chris f

      hahaha, one positive shill post. ngmoco is now officially a joke.

  • rfore

    I love the freemium apps. You can get Eliminate for free and you never have to pay (unless you want to). The energy replenishes over time and ngmoco has so many special offers to get free energy that I never have to pay. I paid $9.99 when the app came out because the game was great and worth it. (It is what they would of priced it at). The only problem is the $30 in app option. If you spend $30 on an app then you should never have to pay another cent imo. Also they announced on facebook that "We Rule" has been submitted. Yay! They are my favorite game developers, well except for Tapulous.

    • chris f

      hahaha, one positive shill post. ngmoco is now officially a joke.

  • Rob

    i dont particularly like this new freemium change I'm fine with in app purchase for unlocking everything but not in touch pets where the dog falls asleep, I have bought before like small dog food but I'd have prefered to have paid the 9.99 and have unlimited dog food but have to pay for extra content like puppy clothes. whatever though it sounds like ngmoco is refining it and I like not having an upfront cost for a game that maybe crap, i'll stick with ngmoco though there a decent company and I think you lot are being very harsh just because you don't want to pay for anything at all

  • Rob

    i dont particularly like this new freemium change I'm fine with in app purchase for unlocking everything but not in touch pets where the dog falls asleep, I have bought before like small dog food but I'd have prefered to have paid the 9.99 and have unlimited dog food but have to pay for extra content like puppy clothes. whatever though it sounds like ngmoco is refining it and I like not having an upfront cost for a game that maybe crap, i'll stick with ngmoco though there a decent company and I think you lot are being very harsh just because you don't want to pay for anything at all