For all the praise heaped on blockbuster titles like Call of Duty and Halo: Reach for having two of the "biggest" entertainment launches of all time, the video game industry is being pulled in another direction: small. Call it the "Angry Birds" effect. The super-simple 2D iPhone game has become a cultural and business phenomenon. Video game makers assumed that casual gamers would be interested in playing while waiting at bus stops, in-between meetings, etc. They didn't, however, expect hard-core gamers to become roped into an "Angry Birds" addiction.

At Wired, Chris Kohler documents a video game industry in transition, with prominent video game companies weighing the cost of investing in blockbuster games that--like overpriced Hollywood tentpoles--don't often reap the rewards associated with huge ($50 million) investments. And with hard-core gamers addicted to titles like "Angry Birds" (which cost $500,000 to make) and Farmville, game makers are "are scrambling to imitate the success of Facebook and iPhone games."

EA Sports boss Peter Moore’s assertion that the gaming industry is “standing on a burning oil platform” kept coming up at DICE [a recent video game industry conference]. The metaphor is clear: Stand still and it’s certain death; jump into the chilly waters and you just might live.
And the direction that they're jumping?
Publishers are likely to pursue core gamers who’d rather play on mobile devices. EA’s Boatman says the success of complex iPad games like Dead Space and Epic’s Infinity Blade show that many traditional gamers are getting sucked in by robust, console-style content sold at a cheaper price on mobile platforms.