MindFuse raising money for casual massively multiplayer online game

Most massively multiplayer online (MMO) games focus on hardcore gamers that spend hours playing, but MindFuse is building a high-end MMO for casual audiences.

The Berkeley, Calif.-based company is building a 3-D animated MMO game where thousands can participate at the same time, but it will focus on casual gamers that don’t have a ton of time to play.

The idea is to create a rich 3-D world that is more like a snack than a feast: Players can play for a shorter time compared with time sinks like “World of Warcraft.” The company was founded by Joseph Walters, an industry veteran formerly of Shockwave and Skunk Studios (developers of games such as Varmintz and QBeeZ). Other founders are Matthew Le Merle and Ira Rothken.

The company has just raised $1 million in convertible debt from the Keiretsu Forum angel investor group, and expects to raise an undisclosed amount of venture capital by within the next month. It says it is confident it can raise a round in the tough environment because it is operates at the intersection of hot market sectors: casual and massively multiplayer online (MMO) games.

Le Merle noted that casual online company Gaia Online launched an MMO, but that game uses 2-D art, whereas MindFuse is shooting for an immersive 3-D experience. Le Merle said that the casual game world is focused on a combination of interaction and light game play, not the heavy-duty “grinding” where players of typical MMOs spend hours collecting stuff to enhance their in-world characters, or avatars.

The company isn’t saying much about its first game yet. It plans on releasing a test version in the spring of 2009. Funds will be used for working capital. It has 14 employees, mostly in Berkeley, and is looking to hire a few more.

He also said that MindFuse is tapping outsourced talent, like a studio in Shanghai and has licensed a third-party game engine for its core infrastructure. Le Merle said that the most direct competition is Trion World Network, an online multiplayer game publisher which has raised $70 million but hasn’t launched any games yet.

The company previously raised $750,000 in two rounds from angels since its founding in 2006. The $1 million convertible debt is a loan that can be converted into equity later.