Massive investment into social games and virtual worlds

Jussi Laakkonen of social gaming stealth startup Everyplay has a great post tracking investment in the social games and virtual worlds space.  The simple message – there is a whole heap of activity, with roughly $2-5m being invested per week, and some large individual deals, including Balderton‘s investment of $87m into Big Fish Games.

Check out the post for the long list of individual deals.

Jussi makes the point that all this investment activity is a sign that the sector will generate massive profits in 4-7 years.  Anyone who reads this blog regularly will know I share that view.  What I am starting to worry about a little though, is that the amount of investment is getting out of kilter with the size of the opportunity, which might lead to what one of my partners has described as venture fratricide.

That said, most of the investment is US based and I think some of these plays will turn out to be geographically/culturally focused – which makes me more optimistic about the prospects for future investment in this space in Europe.