Two days ago, Oberon Media and MySpace announced a partnership to create a new games channel on MySpace, exposing casual games to a potential 110 million MySpace users. Sounds huge, but a lot of you are asking, what does this mean? I spoke with Ezra Kucharz, Oberon’s EVP, North American Online Operations & Global Online Platforms (and owner of the longest job title in casual games) to get the scoop and to present you my take on the significance of this deal.

The first thing you need to know is that this is not a deal about downloadable casual games. Though there will be some download games in the mix, the vast majority of games will be free Web-based single and multi-player games. Early next year, MySpace will launch a Games Channel and enable its 110 million and growing members to add games, post scores, and invite friends to play directly from their personal pages. Imagine finding a Pool game on your friend Bob’s MySpace page, challenging him to play, beating him, and then boasting to all your friends in your network that you vanquished Bob in 9-ball. If you ask me, this is really cool indeed.

According to Ezra, there are over 100 games currently on the multi-player platform and Oberon will be working hard to add a lot more, both through developing the games internally (presumably by its newly acquired Russian and Ukrainian studios) and 3rd party developers. 3rd-party developers can get into the action by working with Oberon’s API and earn money on a revenue share. The way that everyone will make money – Oberon, MySpace, and any 3rd party developers – is through advertising.

Oberon’s multiplayer and Web-based game platform has actually been deployed on a bunch of partner sites, they just have not made as big announcement about it as they did with this MySpace press release. To see the current list of games and platform in action and get an idea of what may be deployed on MySpace, go to Comcast Games, and click on both the link for Web Games and Multiplayer Games.

The games that will be launched will be targeted toward MySpace’s younger audience. So, think arcade and sports games, not the Dream Day Wedding series.

When I asked Ezra what the significance of this deal is to casual games, his answer was interesting. “This is the first great example of an integration between casual social gaming and social networking.” Given that these are among the two fastest growing trends online, I agree with him. In addition, according to Ezra, this deal will increase the awareness of casual games into the mainstream.

My Take

The most interesting part of this deal to me is that it is not a download game partnership but a Web game deal. In 2007, there has been huge buzz around the growth of Web-based casual games, both single and multiplayer. Kongregate, AddictingGames, and Miniclip are growing like crazy. All the big players in casual games are moving in this direction, as exemplified by the recent acquisition of GameTrust by RealArcade, Big Fish Games’ growing online games channel, and now Oberon’s announcement to create a Web games channel with MySpace.

Moreover, a lot of the creativity and innovation happening in casual games is taking place on the Web games side. Here at Gamezebo, we acknowledge this fact, featuring our favorite Web games every Tuesday.

The question is not how big Web-based casual games are – it’s how they will make money. Though there are more advertisers spending money online, there is now also a lot of inventory. And with everyone creating web casual game portals and competing for the same dollars, will CPM rates rise with the sky-rocketing buzz or sink under a flood of unsold inventory? We all know that developers can make money by creating and selling downloadable games to adults. The jury is still out whether developers can make money selling ads to young kids.

Bringing us back to the Oberon-MySpace announcement, the success of this deal will all hinge on how MySpace integrates the Oberon offering. If they just put up a Games Channel and do not promote it to its users, the offering will probably fail. If however, MySpace truly does market the games to its 110 million users worldwide and enable them to share, invite, challenge and play any game seemingly within their MySpace pages, then this could be one of the coolest casual games offerings around.

No matter what happens, Oberon Media is a winner. Regardless of how this plays out, being able to say MySpace is your partner is sort of like going to a job interview with the job title “President of the United States” on your resume. OK, so it’s not that big a deal, but it’s still pretty significant for a company rumored to be preparing to be the first casual game company to go IPO in the future.