But all of a sudden, the downloadable casual game gold rush appears to be over. Even though the Web-based casual games industry hit an estimated $1 billion in revenues in 2007, according to Parks Associates, game developers are finding it increasingly difficult to do business as more and more games flood the market. [...]
"There's no way to make money in this space" anymore, says Gamelab co-founder Eric Zimmerman. "There was this promise that we could do small-scale games and we could try new forms of game play, but the portals want very cutesy, water-downed content." [...]
But the biggest problem facing casual game developers is the Web portals they depend on for the majority of their sales. Most developers provide their games to portals for free in exchange for the mass audience drawn in by a Big Fish Games or a PlayFirst. In exchange, portals receive a 30% to 40% cut of revenues. Since the casual game portals make the most cash off spikes in game sales, it behooves the portals to constantly feature new content. The best games are lucky to survive on a portal's front page list for more than a month.