Last week, Sean Ryan of Meez invited me to his office to give me a sneak peak at the company’s new casual game section, quietly released last week. More importantly, he also showed me a really cool demo of how Meez plans to integrate avatars within casual games themselves.

So cool, in fact, I had to ask Sean to sit down with us for an interview so we could share with you all the details as well as screen shots of their new offering.

For those on Gamezebo who do not know, what is a Meez? How many people have created their own Meez and what can you do with them?

A Meez is an avatar, or a digital representation of yourself which you create by choosing from thousands of clothing options, hairstyles, backgrounds, and fun animations. Over 3 million people have created Meez and we currently add hundreds of thousands of new users each month. Our users generally post them to social media sites, blogs and use them in instant messenger platforms, as well as make Meez/YouTube videos, but the next phase is to have your Meez as an integral part of your game experience.

You just quietly released a new casual game section. What type of casual games can I play on Meez right now?

We offer both the web versions of popular casual games such as Jewel Quest II and Virtual Villagers, as well as flash-only games like Fancy Pants Adventure and Papa Louie. We will rapidly increase the number and variety of games offered on Meez as we see which types of games perform best.

In our case, the Meez API enables the gameplay to trigger a wide variety of emotions in the Meez, bringing a personalized touch to the games – e.g. your Meez will become said if you lose a life in the game.

Tying together the avatars’ emotions into the game play is one of the things that got me excited in your demo. Can you share with our audience future features you are working on, in particular more details of how you plan to integrate your avatars into the casual game experience?

Absolutely – we’re in phase 1 of our Games Channel.

The next phase will be working with 3P developers to actually integrate Meez into the games themselves, similar to what Nintendo has done with their Sports offering on the Wii. Because we’re a 3D avatar system, our partner API offers developers the ability to take snapshots of the Meez at any angle, choose certain frames, remove items/animations, etc., and then call it on the fly when a user enters their Meez name. So imagine a poker game where you can bring your Meez into the game itself – same with sports games, table games, and a wide variety of human-based games. Plus we’ll be launching a whole bunch of new community features – we have a lot of work to do, but it’s exciting.

What are Coinz? What will users will able to do with them?

Coinz are the Meez currency which enables our users to further customize their avatars with premium clothing, backgrounds and animations. Coinz are a key driver of user behavior, and Meez users can generate Coinz by playing the games. We can also reward our users with additional Coinz if they purchase the full version of the game from the developer.

Will you be developing the games yourselves or working with 3rd party developers to offer their casual games on your platform?

We will offer a few games ourselves to show developers the different ways to integrate Meez, but we’re very focused on working with a wide range of developers to offer their games to our growing audience since we believe we can deliver a new and exciting distribution channel.

Kongregate. . . AddictingGames. . .MiniClip. . . and now you. The web games space is suddenly very popular. Why do you think there is such a huge buzz around casual web games and what will you do to differentiate your offering from other highly trafficked competitors?

It’s true that web games are now the hot growth sector as the advertising market has evolved and as the game development costs of other sectors have grown so much that independent developers have been forced out. We differentiate from some of the newer players since we have already have a large audience, so we don’t need to build one, and we differentiate from others through our innovative integration of the avatar into the gameplay, as well as the ability to earn Coinz from gameplay.

Regardless of the buzz, I still do not get how casual web games will pay the bills, since they are free. How do you plan to make money on casual games?

There are 2 ways we directly make money. We serve interstitial ads in front of the games, as well as the banner above the game – due to our strong agency partners such as Glam and Alloy, that drives a reasonable ad rate. In addition, we receive an affiliate fee if our game players decide to purchase the full version of the game from the publisher’s site since we are delivering qualified referrals to the site.

Before Meez, you created the Rhapsody music service and sold it to RealNetworks. How is the music business similar to casual games? How is it different?

I was just discussing this yesterday with my former colleague Andrew Wright (now founder of Smilebox) who ran RealArcade when I was running Real’s music business. The music business is incredibly difficult since 4 major music labels control most of the content and because the user expectation is that all music should be available on the service – it severely limits the innovation that a 3rd party can bring to the customer experience since it’s almost impossible to get all 4 majors to agree to anything interesting.

The games business has a much more diverse set of content suppliers (whether traditional casual or flash game) and it offers sites like Meez the ability to create different user experiences from what Addicting Games or Kongregate may be offering.

What are your favorite casual games that you are playing today?

I really like Build-a-Lot, which I think has brought a fresh game play mechanic, and I think that Diner Dash: Hometown Hero is leading the way in adding strong web and community elements to what was formerly a solitary gaming experience. And, as always, the Last Day of Work gang has delivered another winner with Plant Tycoon – that team is the Blizzard of casual games.

Your plans for Meez casual games remind me of the casual games that are popular in Asian countries such as Korea and China. How will the Asian model of casual games (free games, micro-transactions, online-only play) translate to the US market?

I’m a strong believer that we will see mix of business models in the US, including advertising, purchased downloads, subscriptions and micro-transactions, unlike Asia which seems to have now only one model. Different business models make sense for different demographics (e.g. advertising for the under 21 crowd, subscription for heavy users, micro-transactions for a la carte purchasers, etc.), but I definitely see the fastest growing market to be the virtual item marketplace as Americans get used to the model.

Looking into your crystal ball, what will the future of casual games be 5 years from now?

What’s always exciting about casual games is how the market keeps growing and evolving. 5 years from now, we see a huge range of casual games available for every technology platform (console, ITV, PC, handheld, phone, etc), with the more committed users building entire communities around popular games, similar to what you see with core console games today.

Any final words to your fans out there?

The increasing importance of community and personalization options are going to the big casual game trends in 2008 and we believe Meez will a major casual game distributor due to those trends. You can check us out at Meez.com.