The Azure Mobile Service image that I am using currently is locked down to npm version 1.2.30. There are latest npm version installed on the image(under ...\\Program Files(x86)\
For upgrading npm, you can follow the instructions from David Ebbo on this forum post: https://social.msdn.microsoft.com/Forums/azure/en-US/068ef026-f80d-4bf8-9f40-5d1af33a1024/git-deployment-fails-with-npm-error-when-resolving-a-package-version-containing-a-?forum=windowsazurewebsitespreview