outspark-4In a coup for online game site Outspark, it’s cut a deal to publish a new online rhythm and dancing game developed by Electronic Arts. The deal illustrates how even EA is embracing a big industry shift toward new online business models.

The as-yet-unnamed game is being developed by EA’s recently acquired studio, J2M in South Korea. It will be launched as an online game on Outspark’s site later this year. Today, the game will enter its first closed beta test in a partnership with EA that is akin to a blessing from the Pope for Outspark.

San Francisco-based Outspark publishes online games that mix elements of casual (short play) games with massively multiplayer online games. It uses the free-to-play business model, where players can start for free and then pay when they want to buy virtual goods such as new weapons or armor. Outspark has succeeded by licensing games from the Chinese and Korean game publishers and making them available to Western audiences.

outspark-2The five published Outspark games have been successful, generating an audience of more than 5 million unique monthly visitors. The high traffic — and frequent purchases of virtual goods — enabled Outspark to raise $8.3 million in venture funding during the dry month of July. Outspark now has 60 employees and has raised $20 million to date. Investors include DCM, Syncom Venture Partners, SBI Investment, Mille Plateau, Tencent and Altos Ventures. Outspark’s games have done well because they’re social and can be easily customized.

“This is our biggest deal so far on the publishing side,” Choe said.

Outspark has made its online game platform available for other game developers and publishers. Susan Choe, chief executive of Outspark, said in an interview that the online casual rhythm and dancing game is like Konami’s Dance Dance Revolution games, with shopping. The guys get to show off their dance moves and the girls get to form groups for both dancing and shopping.

outspark-3The game is EA’s first Korea-developed online game that will make its way to North American audiences. Outspark is customizing the game for North Americans, and it is adding design and social networking features aimed at making it more popular. Outspark will operate the game and be responsible for things such as support and customer service.

Most of Outspark’s gamers just enjoy the free games. But around 10 percent or so spend money, and the average revenue among those players is $50 to $60 a month. The new game is Outspark’s first music title, one of fast-growing segments of the past few years. Choe said the game will incorporate the likenesses of celebrities and will also feature top 40 songs.

The music game market has flattened so far this year, but there are big games coming. Next week EA is launching The Beatles Rock Band with MTV Networks and Harmonix, while Activision Blizzard has lined up titles like Guitar Hero 5, Band Hero and DJ Hero.