Forbes.com has an interesting article on the casual games bubble bursting, that mentions that the portals aren’t really exploiting the long tail. They’ve trained their customers to grab games from one of three genres only, and cycle stuff off the top so rapidly that a game with a six month ramp to success (such as Peggle) need massive marketing pushes in order to be profitable.

But the biggest problem facing casual game developers is the Web portals they depend on for the majority of their sales. Most developers provide their games to portals for free in exchange for the mass audience drawn in by a Big Fish Games or a PlayFirst. In exchange, portals receive a 30% to 40% cut of revenues. Since the casual game portals make the most cash off spikes in game sales, it behooves the portals to constantly feature new content. The best games are lucky to survive on a portal’s front page list for more than a month.

It goes to show that it’s easy to make a shelf-based, hit-driven business even in a long-tail sort of environment. The article comments that this situation could be fixed if the portals ran more like Amazon or Netflix, marketing their back catalog much more aggressively instead of only grabbing the latest. On the other hand, this may be tricky for games, which are so heavily driven by neophilia: playing old games is a tough sell often, because as the Theory of Fun tells us, if you’ve moved on from a game, it is probably not fun for you anymore.

In the long run, this isn’t good for the portals, as their smaller developers exit the market in search of more financially rewarding pastures. Social networks are mentioned — I think many of these developers are in for a shock as to how different an environment Facebook is from Big Fish.