Generally, when someone says "This is not a bubble", it's usually a sign that there is a bubble. Social gaming companies are commanding huge valuations and social games and casual MMOs are showing huge user numbers. This is a mini dotcom boom waiting to happen. As the opportunities to make money out of thin air with a quick IPO increase, so do the incentives to inflate subscriber numbers and revenues. It would be great to be proved wrong on this one, but I've got a hunch that one of the prominent companies in these sectors will experience a major, probably even fatal, blip in 2010.
That's not to say that social gaming won't be a major sector of the industry going forward. I think it will - the Facebook and iPhone app have replaced Solitaire and Minesweeper as the five minute timewasters of a new generation of office workers. (More on the psychology of boredom here.)
Bonus prediction: EA will bring its brands such as The Sims and FIFA to Facebook via Playfish, but the wider community will be nonplussed. Even The Sims is not a large brand compared to the user numbers that the likes of Mafia Wars and Farmville can boast.
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