GamerDNA has been through several iterations in its life.

The social network and gaming community started life as Sparkforge Entertainment before changing its name to GuildCafe as it focused on the burgeoning MMO market. It even attracted $3 million in venture capital from Flybridge Capital Partners.

The company is now focused on a sophisticated advertising network that targets ads based on the games that its audience are playing or talking about.

But it’s had to cut 50% of its staff (six out of 13) in the past week to ensure that it is operating at breakeven.

I’m not surprised. And the main reason is not my initial scepticism (which was that a community-business focused on taking a small percentage of the communities from big MMOs was always going to be limited).

It’s that the days of big display ad budgets for games are over.

As the core market shrinks, and publishers shift their attention to MMOs, virtual worlds and Facebook games, the traditional, expensive advertising with large banners, homepage takeovers and pre-roll videos has peaked.

The new advertising (which will be huge) will focus on conversions. It will be about getting users to click on a link, register for a game and play it.

And these users will not be the hardcore audience who count themselves as “gamers”. It will be amongst the vast swathes of the population who play games but don’t really notice.

The Farmville players. The Bejewelled players. The iPhone gamers.

And those people won’t go to a gaming site. Instead, marketers (who will have vast budgets tied to conversion rates and ARPU) will have to find those gamers where they live – on social networking sites, or Mumsnet, or the Daily Mail.

Which means that, much as it pains me to say it, companies who are dependent on the advertising largesse of Electronic Arts, Activision and THQ are going to have to start looking for new business models pretty damn quickly.

Related posts:

1. The CHIPS are down: UK independent games retailer Chipsworld enters liquidation
2. Namco Bandai restructures, cuts 10% of its workforce
3. If QuakeLive can’t survive on advertising alone, who can?

Powered by GamerDNA, tweetmygaming.com shows you what games are *currently* being talked about on Twitter.

The technology monitors the stream in real-time. Anytime it recognises a gaming title, it clocks it up in the counter to measure the buzz about that game on Twitter.

In the last 21 days, it has clocked up over 425,000 tweets about games. The most popular games are surprisingly mainstream (The Sims 3, World of Warcraft, Wii Fit), given that Twitter is still a new technology.

On the other hand, Second Life makes it into the Top 10.

Tweetmygaming lets PRs track the buzz about games they are promoting. I’m still trying to work out if it is useful in any other way.

Related posts:

1. Q: Who does the Twitterverse render obsolete? A: The newspaper editor
2. Gamesbrief’s Weekly Tweets for 2009-12-04
3. Gamesbrief’s Weekly Tweets for 2010-01-12