It is a big switch to go from putting out packaged titles to building a service. Casual game companies may not yet have the cultural DNA to build a robust online gaming world.

• Integration of web and game development. In some larger groups, web and game development often exist in two separate silos. The development platforms are different, the skills are different, and the goals have historically been different.
  
  Yet the development of the games and the development of the base web service are intimately intertwined activities. In order for the service to succeed, web and game development needs to be integrated in cross-functional teams. The game development teams need team members that intimately understand web metrics, web usability, flash development and customer support. Support for virtual currencies, achievements, and ties into service wide meta-games are typical features, and you need teams that can handle the cross-discipline requirements.
• Packaged goods mindset. Currently, most casual game developers ship complete, packaged games. Teams are steeped in the premise that they create a complete set of levels and gameplay that is sold to the customer for a one-time fee. When you get into services, this assumption is challenged by the need for incremental updates, virtual goods, seasonal events, and hot fixes.
• Inexperience dealing with community support. There is a rule of thumb that the real development on an MMO doesn't begin until it has gone live. The social anarchy that results from thousands of players interacting with your code requires a completely different form of support than a packaged game. An experienced live support team would need to be grown to handle these situations.
• Not enough people on the team. Many casual titles are put out by one- or two-person shops. They outsource the artwork, the sound and often even much of the marketing and business. Some smaller groups barely have enough human capital to pop out a game or two a year, never mind manage a service. As a result, most successful casual services will be built by medium-sized groups who can devote a developer (or five) to building and maintaining the service.
• Lack of business experience running a profitable service. Running a successful service means mastering the business side of micropayments, price setting, seasonal promotions, and virtual currency issues. Making that switch from monetizing each game to monetizing the service can be painful. A common mistake is to treat the service as a free add-on in the hope of selling more packaged goods. The result is a developer who finds that their service investments just don't pay off.

The future powerhouses of the casual games industry are companies that have the best attributes of both existing developers and portals, tied together by a rich meta-game experience. A community of passionate gamers, heavily invested in the service, helps the company weather the inevitable surge of talented upstart game developers and predatory middlemen.

Other companies are sprouting up that embrace the hybrid portal/casual game developer/MMO from the very start.

• Start from scratch: BuildCafé.com and Flowplay.com both have the stated mission of building a social community around casual games, complete with avatars, virtual currency and virtual item sales.
• Partner: Service operators such as Outspark are building up considerable expertise managing MMOs brought over from Asia. These are the new middlemen of the industry, though they have a much tighter relationship with the developer than current portals.
• Add a service to your existing titles. Middleware companies like MetaPlace or Aria are making the cost of starting your own service smaller than ever. I suspect we'll see a half dozen more announcements over the coming year.

If your company is not interested in created a major online community built around casual games, others will happily reap the benefits of doing so.

Still plenty of room

Yet, this is not a winner-take-all market. A mere 100,000 active users can result in a vibrant, profitable community that lasts for a decade or longer. Some survive on far less. People will come for the games, and stay for the community. The business dynamics are far more palatable than the vast numbers needed to make a pure advertising or packaged games business work.

There is room for hundreds, perhaps thousands of such services, occupying a spectrum of interesting niches. Most will fly under the radar, completely unnoticed by mainstream media and generally unaffected by the ups and downs of the marketplace. The market, for at least a decade or so, will become a fragmented place spotted with islands of humanity. Some islands will be bigger and more noticeable than others, but they will not remove the opportunity for the willing entrepreneur to carve out a spot of their own.