Zynga IPO leads social games investment spree; will the bubble burst?

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Social games bubbleZynga is poised to present its multi-billion dollar IPO in a matter of days, PopCap is looking to do the same (much later), and countless developers are being bought, sold and invested in daily. Frankly, it's crazy town in the social games business these days.

For instance, as Zynga prepares to become at least the second most valuable game company globally compared to EA and Activision Blizzard (if not the most valuable), Google leads an $85 million investment in Kabam, creator of 'hardcore' social games like most recently Global Warfare, according to the San Francisco Chronicle.

All the while, Finnish developer Supercell has raised $12 million using a similar strategy, VentureBeat reports. If that wasn't enough, Turkish developer Peak Games just raised a cool $5 million to make more games for the Turkish, Middle Eastern and North African market, according to the Wall Street Journal. Crazy town, we say, but will things ever calm down?

With estimates that social gaming will soar to become a $5 billion industry by 2015, probably not anytime soon. Though, as history has told us, it has to happen at some point. Social games have become a major component to what I call the "Internet Bubble 2.0" with the likes of Facebook, Google and Twitter gobbling up companies and raking in the dough. You'd think with this many investments and buyouts flying around, the social games industry would have to reach a breaking point soon, but nay.

Zynga IPO
These companies are just getting started. Most social game developers haven't even used Facebook to its full potential, as we've heard many designers cry out. Not to mention even Zynga hasn't achieved its long-term goals like mobile dominance, and Google's rumored social games service isn't here yet. Until another company can effectively compete on Zynga's level--and truly over-saturate the space--expect your favorite social games companies to be around for a long time. Well, at least until 2015, if we all make it that far.

[Image Credits: All Things D, Richard Heeks]

When do you think the social games money madness will cease? Will it take a company to compete with Zynga head on for that to happen, or will something else like, say, public disinterest bring Zynga and the like down from Cloud 9? Sound off in the comments. Add Comment.
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