Remember when I said that virtual online worlds were the next big thing in casual games but that most would not make money and fail?

Well, what I forgot to mention is that Google would launch their own virtual online world without a care about making money. So, the good news for all ye casual game virtual world makers is that your business plan has been legitimized. The bad news is that it’s game over because Google has already won.

Check out Google Lively (you can actually embed your own virtual world space within any Web page, cool!) and read Gamasutra’s interesting interview with Google.

UpdateClick here for Techcrunch’s report card of the $345 million invested in virtual worlds so far this year.