UltiZen raises $8M for game development outsourcing business

China’s UltiZen Games said it has raised $8 million for its game development outsourcing business in a third round of funding.

Shanghai-based UltiZen makes art and games for game publishes such as Trilogy Studios. It also develops and publishes online games under the U-Pal brand, and it develops and publishes mobile games under the Mo-Star brand. The company said it will use the funding to expand its online web and mobile game publishing businesses.

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Outsourcing has become important in the video game industry as costs for making big titles continue to rise. It’s common for publishers to spend tens of millions of dollars developing games. But they can offload some of the risk of running internal game studios by tapping outsourcing firms such as UltiZen, which have typically focused on making art for games.

The funding was led by JAFCO Asia and it also included investors Hotung Investment Holdings and Tokio Marine Investment Services. Founded in 2005, UltiZen started as a game outsourcing company and is now moving up the food chain to doing its own games. It has more than 400 employees across three divisions in Shanghai, SuZhou and Beijing. Other existing investors include Dragonvest Partners, PacLink, and CA-JAIC.

The company’s chief executive is Lan Haiwen. The company’s first online web game, War of Gods, was launched in May 2009 and it is operating in Europe, North America, Japan, Korea, Vietnam, Taiwan and Malaysia. In the second half of the year, the company plans to launch a game portal with more than five titles published under the U-Pal brand. On the mobile front, UltiZen launched Princess Fury on the iPhone/iPad on June 3. The company plans to launch at least one new game per month in the second half of 2010.