While I realize this guy has a big failure tied to his name, I also tend to agree with him on this point.
I remember the huge craze over anything with a .com at the end of it in the late 90's and early oughts. Anyone remember Pets.com?
Sometimes investors are so rabid to be in on the next big thing, their speculation is bigger than the pool of profit to be had. While some .coms remain profitable today, many others struggle. Even mighty ebay is having trouble, and it was considered the juggernaut of .coms.
I still say, there is a limited amount of money to be had in social gaming. People who might put a dollar or two down to buy a new Smurf hat aren't going to support a multimillion dollar production. These games are profitable because they are cheap to make. But if everyone gets in on the business, how do you compete against so many identical products? Companies will have to start making flashier and flashier games, and that's when they will begin to fail.
People who only play free to play games, for the most part, aren't interested in plunking down $60 for a game that uses a controller that has more than 10 buttons on it, and requires an hour long tutorial to learn how to play it. If they were, they'd have done it long ago. They want something simple, and cheap - something they can fiddle with while they fuck off at work, or stand in the grocery line. There is a limit to how much money people like this are willing to spend to screw around on their phone. The more expensive these free to play endeavors become, the less profit these companies will make.
Personally, I also see this as a bubble. There's money to be had there, for sure. It just isn't as much as all the investors hope for.
), and just about every third AAA developer are quick to tell us that smartphone gaming is a short-term temporary concept.
