Gigaom is running a fantastic editorial about how App Store sensation ngmoco changed its business model from conventional to unconventional, how it was forced to transform or die.

As the story goes, the studio was had a traditional game-making approach -- spit out a premium game and move on to another. As time went on, ngmoco discovered that this wasn’t a model that it could use to become a million-dollar developer. The rush to the bottom and the volcanic nature of the App Store’s charts both aren't conducive to this. So, the studio made the hard and reasonable choice: move to ‘freemium.’ The thinking was that, in order to become a multi-million dollar company, ngmoco needed to put several games on the charts for around a year -- and that's in addition to enticing people to keep paying for the same product over and over.

It worked.

Speaking to Gigaoam: “Games are not built for a fleeting moment in the charts, but are built for an (ongoing) relationship with the customer, “ ngmoco CEO Neal Young said. “The longer you can maintain that relationship, the longer the opportunity.”

Moving to this model wasn’t a hit among the hardcore base -- like our own here -- but it did score ngmoco a sweet buy-out opportunity from DeNA. End of the story is that ngmoco succeeded in its switch and is flourishing as a developer. Not that this is new information or anything -- but it's interesting to see the company reflecting on its own history.

Really, I guess the thing you should take home from this isn’t that ngmoco are sell-outs, conceptually and game-wise. Nah, the thing to take home is that ngmoco wanted to be a company that could support itself and, as a result of the App Store climate, freemium was the only way that it could.

Broken or not, the App Store is evolving at a rapid pace, with freemium now becoming the model most big companies are tackling post-ngmoco success. I wonder if we'll still be nodding our heads in understanding at this piece just a few years from now, or if the App Store will oscillate in the opposite direction and will be driven by premium titles instead. We'll just have to wait and see.

  • Picticon

    That is the sad state of things. People are unwilling to spend more than 4$ on a full featured game. But they are more than happy to drop 40$ for virtual Smurfberries. /sigh

  • Mister Mumbles

    "...how it was forced to transform or die."

    Pfft. That's about the biggest load of crock I've heard in a while. They were doing well enough before changing their business model. Now it's just all-out corporate greed with at best mediocre games.

    'Free-to-play' is bad enough on a standard computer. On a mobile device it's even worse.

    • http://toucharcade.com Eli Hodapp

      What you don't realize is that ngmoco was a company powered by investor dollars from the start. When you're playing with millions of dollars of other people's money, you can't shrug and say "We're doing well enough!"

      • Sebastian

        Then they should've died.

        This is a success story of investment capital. Honestly: I don't need to read this. It's like saying "McD had to decide whether to die as a company or start offering alibi products like salad to lighten the image - and be able to keep selling fatty foods killing millions of people every year with fat related illnesses".

        You wouldn't expect a food and health magazine to print that. So just don't. I don't need to know that NGMoco was successfully converting their business so they could rake in a huge amount of payout money on a blog about the best games on the iOS platform. The truth hurts enough (e.g. that there are developers out there who are driven bei investment capital), you don't have to rub my face in it.

      • PyroDecimo

        Honestly, it's not like I like Ngmoco's freemium model either, but this is Hodapp's site and hw can post what the hell he wants. I don't find the post irrelevant or pointless. It's interesting information, and while I don't like freemium games, this does give insight into Ngmoco as a company and how iOS games will progress in future. If you don't like what you read, then don't. What's the point in whining here and making a fool of yourself?

      • Sebastian

        Aw jeez another one of those people who tell me that "If you don't like it, go elsewhere".

        If you don't like it, read another comment. I'm free to speak my mind in the comments. If you don't like my comment, go elsewhere.

      • PyroDecimo

        Well not to start a flame war but isn't that what you're doing? If you don't like the article, why post? You may as well just read another TA article.

        I'm just making the point that there ARE readers who want to hear about this, so I certainly wouldn't want Hodapp to stop posting certain articles because they don't agree with you.

      • Sebastian

        I post to let him know that this is not what I want to read. I am his "customer". Don't you think he'd like customer feedback? I give him my attention and he gives me interesting things to read. My attention is what the advertisers pay for. You know, his _real_ customers ;-)

  • Steve

    ngmoco who? I don't remember them doing anything particularly cool other then Rolando. Lost all their passion after that.

    • gee

      i agreed!!! ngnamco who??

    • LBG

      And they didn't even make the Rolando games, they just published them. They've never made a good game IMO.

      • Kevin

        topple 1/2, dropship, star defense aren't good games?

  • typo

    freemium, eh ? "by popular demand" I suppose... yeah right...

  • Adams Immersive

    It seems to me that people use the term “freemium” in at least three different ways, not all of which are objectionable:

    1. Free “lite” version, then pay for the full game if you like it. (Same as without IAP, in other words, but a single download. I like the convenience. The most “freemium”-like way to do this is to have the lite be fully functional but you have limited plays per day. So be it—that’s one way to make a free trial be more complete.)

    2. Subscription-like “pay forever” model, where free play is limited to the point of being useless. It might be a literal subscription, or some in-game resource you just can’t effectively obtain any other way. I realize servers cost something, but this is not the model for me!

    3. A good free game with optional—not necessary—paid enhancements. More levels, ways to advance more quickly if you want, etc. (If it’s multiplayer, that must be handled carefully!) I have no problem with this. I’ll buy the add-ons or not, but I won’t feel tricked.

  • Ghfhfgh

    that's exactly how every compagny works: the illusion of a said proximity with the client, a bond as real as friendship or whatever feels as strong as a family bond; like they will never let you down and listen to your every wish. everything to help the pill go down the throat. and how far it is from the harsh reality. yes they are dependent from investment, wich is why I'm not surprised at all they are becoming this today: investors are dreaming of a world market where you do not possess but rent.

  • YoureAMessy

    These guys still make games?

  • shauns

    What ever happened to Rolando 3 - this could have been a real iOS winning franchise in line with Angry Birds, if it had been given the right level of investment.

  • Art Vandelay

    Go to their website -- all they make is a dozen Farmville knockoffs. Forget the payment model, how can they survive making the same boring, pointless game over and over? Is there really unlimited demand for this crap?

  • http://www.facebook.com/people/Andrzej-Raczynski/668591493 Andrzej Raczynski

    i'm thinking they're referring to fremium as in 'game is free, extra tinkelberries will cost you money', that's fine, except my experience has been that for the most part these types of games tend to attempt to force you to buy stuff due to making the game too difficult (on purpose) or making you buy 'speed up the game' items.

    both have always forced me to instantly delete the game. but judging by their findings, i'm in the minority.

    but if it works for them, all the more power.

  • Dickjones

    These days if I see a game is freemium I won't even download it.

    I will only pay ONCE guys, so stop trying to milk me like a cow.

  • Ngageuser

    I feel bad for dEna, i think they made a very bad investment in Ngmoco. EA got Chillingo for a lot less and look how irrelevant ngmoco is now.

  • Scott

    Yuck! Everytime I hear the name ngmoco I get a bad taste in my mouth. Once they switched to fremium all there games tanked! Last game that was anygood was Rolando and that was before the fermium version.

    The fremium model is fundamentally flawed. Obviously you can't get anything in this world for nothing. Everything has a price. Even FREE. If it's not with your pocket book, it's with your privacy, etc (ie. facebook)

    Fremium basically prays on little kids to get there parents to pay for more content. But not before the kid is hooked. It's like crack -addictive! I call shame on ngmoco! boo!

  • Tiredgamer

    Boogles my mind why Ngmoco is still front page worthy, why do we need to be reminded that ngmoco makes a lot of money over this freemium model. Their games suck period.

  • Guest

    Logo update: "ngmoco:("

  • http://www.appfreakblog.com appfreak

    Whatever happened to ngmoco is their problem. It is a shame they took Freeverse down with them - an otherwise very respectable company that managed to ship some of their games with every new Mac and was behind decent iOS releases such as Warpgate

    • Gwet17

      Yeah, when I first got my iPod, I searched ngmoco and Freeverse every few days in the app store, but they've released truly nothing decent for months.

  • Ephelant

    “Games are not built for a fleeting moment in the charts, but are built for an (ongoing) relationship with the customer, “

    The hypocrisy is astonishing. These guys dumped Eliminate Pro as soon as the game stopped being immensely profitable and abandoned an entire community of loyal players. It's the best FPS experience I've had on any portable platform and they won't even update it for 4.x compatibility.

    NGMoco are full of it. They just churn out garbage sim city / farmville clones for gullible little kids whose parents get screwed by in app purchases.

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