“NHN grants Aeria Games the first right to review and obtain, with preferential treatment, all MMO games that NHN has obtained licenses to, whether through its wholly-owned or partially-owned studios or third-party studios. The transaction also includes two licenses from NHN’s lineup,” said Aeria chief executive Lan Hoang (pictured below). The press release lists the two games as shooters Alliance of Valiant Arms (A.V.A.) and Soldier Front.

Hoang said that Aeria has been profitable to date and that the investment is the first fundraising the company has done from an outside investor. “The key for us is the acquisition of Ijji and the content agreement. The additional resources will be used to acquire Triple-A titles and aggressively expand our platform to the mobile gaming market, with a focus on our core audience of mid- and hardcore gamers, aka our power players. We will be launching through our platform a number of multi-player games for the smartphones and the tablets in the very near future,” he said.

The Ijji acquisition will add about 10 million plus users to the Aeria’s current 35 million core players. The company has a number of online games, including the MMO Eden Eternal, the MMORPG Shaiya, the supernatural MMOFPS Wolf Team, the strategy game Golden Age and an upcoming action shooter named Repulse.

“The shooters community, which Ijji is really known for, is probably one of the most hardcore and loyal gaming communities,” Hoang said. “Our audiences are very complementary, so it’s a good fit and one that will help to further foster an even more active community amongst Aeria Games users.”

Aeria Games, founded in 2006, has offices in the US, Germany and Brazil, publishing in nine languages across 30 countries.

NHN Corporation, established in 1999, is a multinational Korean internet company, operating a Korean search portal with more than 17 million unique daily visitors as well as a game portal, Hangame, which reports $422 million in revenue last year, from over 30 million registered users.

The deal was Japan’s biggest IPO this year and it doesn’t augur well for Zynga, which plans to start trading shares on Thursday.

Nexon sold more than 70 million shares. It closed at 1,270 yen, or $16.31 a share, compared with its opening price of 1,300 yen, or $16.70 a share. Nexon has one more day of trading before Zynga goes out, but it may be tough. The broader Nikkei market fell 0.4 percent, and rivals Gree fell 2.7 percent and DeNA fell 4.3 percent.

Zynga hopes to raise around $1 billion at a smaller valuation than it initially hoped because of weak financial markets. The IPO is going to be a nail biter, as at least one analyst said Zynga’s price range of $8.50 to $10 a share seems too high.

Nexon’s market capitalization is less than $7 billion, while Zynga is shooting for $8.9 billion. But Nexon is more profitable than Zynga, with year-to-date profits at $260 million, compared to $30 million for Zynga.

Nexon, which pioneered the free-to-play and virtual goods business model, grew up in Korea and recently moved its headquarters to Tokyo. It is part of a $49 billion games market, and Nexon said it expects growth across all markets.

“Part of the problem is that they priced it at fair value, so it wasn’t going to come on at a huge premium,” said David Gibson, an analyst at Macquarie Capital Securities in Tokyo, in an interview with Reuters. Some Nexon shareholders were allowed to sell their holdings immediately. Nexon has more than 77 million monthly active users.

Venture capital investment in Asia has nearly tripled in the past five years to $15.6 billion. China has leaped ahead to become the world’s second-largest venture market at $7.6 billion investments, while India has climbed to third place at $5.8 billion.

Together, these dragon and tiger markets account for 13 percent of the $37.8 billion put into startups globally. That’s up from 5 percent in 2005.

Since 2005, more than 6,000 startups in Asia – about half of them in India and China alone – have been venture funded.

These two markets are also tops when it comes to mobile service adoption. China ranks highest in the world, with 840 million mobile service subscribers, while India places second with 673 million subscribers. Vietnam has 78 million mobile service subscribers in a country of 89 million people!

China is also gaining ground when it comes to technology patents. The country scores fourth worldwide for new patent applications, up from tenth place in 2005. Two giant Chinese companies – ZTE Corp. and Huawei Technologies – are among the top four corporate patent filers in the world.

For sure, the U.S. still leads the global venture capital market, weighing in with 70 percent of investments in startups and 64 percent of deals worldwide. But VC spending in America has flattened and hasn’t recovered momentum since the last peak more than 10 years ago. The U.S. remains the world’s superpower innovator, too, with 28 percent of all patent applications in 2010. But the U.S. share of patent filings has slipped from 34 percent in 2005, while China’s portion stands at 7.6 percent, up by 56 percent in 2010.

In other telling signs of the eastward shift, the U.S. slipped to fifth from third place in a recent World Economic Forum ranking of 138 countries by technology development and competitiveness. Singapore ranked second, while Taiwan and Korea moved up among the top 10, China leapfrogged to 36th place, and Vietnam scored with the fastest climb.

Asia’s innovation hotspots are fast emerging as first choice destinations for bright young entrepreneurs. By 2014, an estimated 200,000 skilled tech workers leave the U.S. to return to their Chinese and Indian homelands to find new opportunities and to create tomorrow’s leading startups. Consider some of the great companies created by Chinese and Indian immigrants to the Valley: Sun Microsystems, Hotmail, Yahoo and YouTube.

This year, Silicon Valley serial entrepreneur Elliott Ng took a job at Google in China and moved his young family there. Raj Gilda left a VP post at Citigroup in New York and moved to Pune in India to ramp up a vocational training and micro-lending operation called Lend-A-Hand. Mentor and tech entrepreneur Bryan Pelz left Los Angeles for Ho Chi Minh City to work with mobile gaming and search startup VNG, which borrows from Shanda, Tencent, Google and Baidu. Yale undergrad Alice Wang left the ivy-covered walls for a job at a Groupon venture in China.

Getting in on the action, Singapore is making good with government hand-outs and skillful coaching for entrepreneurs. KC Wong is jumpstarting Sparky Animation in Singapore and wants to make it in Hollywood. Mobile security startup Tencube, incubated at the National University of Singapore, was acquired by McAfee. Taiwan is luring startups to move beyond their base in churning out more than semiconductors and electronic goods, and has turned on the lights for a number of LED startups.

The super-charged emerging markets of Asia promise to deliver the next Facebook phase – a turning point that will spark a creativity surge like the social media boom. Startups create jobs and wealth, and enthusiasm for future innovations.

Once, Sand Hill Road investors rarely scouted deals outside the San Francisco Bay Area. Now, they can’t get enough of Asia. Silicon Valley leader Dick Kramlich of giant New Enterprise Associates left his Nob Hill home and art collection and moved with his wife to Shanghai for more than a year to be in the thick of this happening city. Venture heavy Gary Rieschel of Qiming Venture Partners left behind a Bay Area career and his wine collection to relocate to Shanghai, working from the 39th floor of JinMao Tower overlooking the Bund. Former Sequoia Capital India head Sumir Chadha – now back at WestBridge Capital Partners – moved from his comfortable suburban residence in Burlingame to a sea-facing condo in Mumbai. IDG chairman Pat McGovern has made 100 trips to China and is now exploring new terrain in Vietnam and India, and financing dozens of scrappy young entrepreneurial ventures.

“The opportunity is now. In a few years, it will be too late,” says Kai-Fu Lee, the former president of Google China. Now chairman and CEO of Beijing-based Innovation Works, Lee advises young Chinese entrepreneurs in Silicon Valley to “Go East” and he’s financing dozens of startups and mentoring the founders.

These trends underscore a shift in entrepreneurial and inventive muscle to Asia. As the currents for tech innovation move across the Pacific Ocean to China and onward to the Indian Ocean, America’s long-term competiveness is increasingly at stake. Consider how important venture capital is to economic growth:  In 2009, venture-backed companies in the U.S. contributed 21 percent of the U.S. gross domestic product and 12 million jobs, according to IHS Global Insight.

Powerful tides are shifting, and quickly, as not only Chinese and Indian immigrants return home for improved job opportunities and family ties, but also young professionals and bright college graduates pack their bags and settle into a comfortable lifestyle and community of like-minded dynamos in Asia’s top tier cities. It’s not a roundtrip ticket either, but a several years’ journey or a lifetime commitment.

This exodus is laying a foundation for Asia to out-innovate America.

“Silicon Valley will not forfeit its leadership, but China and India will compete heavily,” says Ajit Nazre, a partner at top tier venture firm Kleiner Perkins Caufield & Byers. “We will see hundreds of companies coming out from these markets with huge growth and lots of potential.”

This new innovation dawn in Asia is really only the beginning. Over the next two decades, the startup game will play out in a new geography distant from its Silicon Valley roots.

Rebecca A. Fannin is the author of Startup Asia (Wiley, 2011) and Silicon Dragon (McGraw-Hill, 2008). Fannin will be appearing at Kepler’s Book Store, 1010 El Camino Real, in Menlo Park, Calif. on Friday, Dec. 9, at 6pm, for a talk, book signing and cocktail reception. 

[Top image via Lu Wenjuan/Shutterstock]

It’s the latest in a number of incubators that have popped up with a similar structure — reflecting a convergence around a best-practices approach, perhaps. There’s Y-Combinator, Seedcamp, and Techstars, for example. Litmus is similar to these, only has more distinct steps in the move toward launch, explains Web 2.0 Asia:

When Litmus team receives a business plan, they review the b-plan thoroughly to assess potential and feasibility (hence the name Litmus); The business plans that have passed this initial stage get incubated through closed beta (yellow), open beta (purple), service open (blue), and “graduation” (red).