Traditional gaming sites and platforms are losing players as they shift to play online for free with friends.
This merging of social networks with games is set to dominate the schedule of this year's Game Developers Conference in San Francisco.
Titles include Farmville and Mafia Wars that can be played on Facebook.
"The last two years social gaming has been living in its own bubble. This year that changes," said Sebastien de Halleaux co-founder of Playfish.
Playfish, which was recently acquired by Electronic Arts, EA, has 11 online games and more than 61 million people who play them worldwide.
"The Game Developers Conference (GDC) is going to mark the beginning of something very exciting in the games industry and that is the birth of the social game industry as a mainstream industry," Mr de Halleaux told BBC News.
"We are talking about an audience of hundreds of millions of users for social games and that is why there is a lot of excitement."
According to Neilsen Online, sites like Yahoo Games, Pogo and AOL Games have all lost users as they migrate to social networking platforms like Facebook to play with friends.
'Crashing the party'
Proof of how seriously the nascent social gaming industry is being taken can be seen at GDC which has consolidated previous sessions on social and online games into a two day summit.
"This definitely shows the importance of the social and online gaming space as one of the few areas of our industry to have grown so fast," said Simon Carless GDC's global brand director.
The summit will comprise of a total of 37 sessions discussing everything from making money through the sale of virtual goods to delivering games over the cloud and from interactive story techniques to the state of the industry.
"It is clear from all the parties happening this week, and the panels and sessions going on that social gaming is crashing the party of the hardcore console game industry," said Dean Takahashi, lead writer for the GamesBeat conference, which will take place during GDC.
"Social and mobile gaming are growing fast and coming on strong. They are undermining the traditional gaming industry which likes to charge $60 for every game compared to these free-to-play games where you make your money selling virtual goods for 25 cents or a buck," Mr Takahashi told BBC News.
'Sexy new thing'
This year's GDC is expected to be an altogether more upbeat event compared to last year which saw a marginal drop to 17,000 attendees because of the slumping economy.
"The mood is clearly positive because people are starting to see there are so many avenues you can develop for that you can make a living from," said GDC's Mr Carless.
One of those big platforms is the iPhone, which will have its own two day summit stretching over 16 sessions.
Industry analyst Michael Pachter of Wedbush Morgan said that while iPhone developers " are not making a lot of money developing for the iPhone they all want to see their apps downloaded ten million times".
That has helped "reinvigorate mobile gaming", he added.
Many are now asking whether developers will also latch on to Apple's new iPad.
The tablet computer which was launched amid a media storm will go on sale at the beginning of next month.
"I think it will have an impact on the developer community albeit it may only sell four to six million units," said GamesBeat's Mr Takahashi.
"It will be the sexy new thing and developers will want to get in on it early."
Playfish's Mr de Halleaux agreed.
"It is an opportunity for gaming in general. As to whether it will be specifically for social gaming remains to be seen."
Mr Pachter does not believe the iPad will have the same impact the iPhone and iPod Touch had on gaming or that developers will devote much time to it.
"Early sales predictions are not impressive and if people aren't carrying it, then developers won't go out of their way to develop for it. They will just port over what they develop for the iPhone."
Online Gaming News, March 2010
