SAN FRANCISCO — Chris DeWolfe has become an authority on mobile and social gaming.

He became a social media pioneer when he founded MySpace. He sold that company to News Corp. in 2005, and in 2010, he got backing from Austin Ventures to buy the social gaming platform MindJolt. In 2011, the company purchased mobile gaming firmSGN and online gaming network Hallpass Media. SGN also bought game developer Mob Science, and the company is now making a wide variety of casual puzzle games across Facebook, iOS, Android, and Amazon.

DeWolfe, who runs the company that has been renamed SGN, has a lot to say about mobile and social gaming, from the downside of Zynga’s collapse to the upside of Candy Crush Saga maker King’s rise. He hopes to score with the next big mobile hit, but in meantime, he is watching and learning as the mobile gaming industry evolves. And he hasn’t abandoned making social games on Facebook, as he still sees it as a great proving ground for new ideas.

I moderated a chat with DeWolfe at last week’s Game Developers Conference 2014. Here’s an edited transcript of our talk.

casino sgn bingo blingoGamesBeat: What’s your view of the state of the industry? Outside of Flappy Bird, is it true that only three games are accounting for most of the industry’s revenue right now? And if you’re not one of those three, what should your strategy be to succeed?

Chris DeWolfe: For the state of the industry, it’s great. We all went through this hangover from Zynga and their IPO, when their stock price fell down to $2 [a share]. It put a shadow across any investment, whether it was corporate M&A, venture investment, or seed investment. It hurt everyone quite a bit.

It was a bit unfounded, I think, because that blackout was more about one company than it was about the health and future of the entire industry. From my perspective, I see Supercell, which started in 2011, sell half of their company for $3.2 billion. I see amazing companies in Japan and Korea. I see King, that’s been around for 10 years, going out for a $7 billion IPO. I see Kabam. I know what our own numbers are, and they continue to double every year.

We see all these other games, too, creeping into the top 10 from time to time and entering the pop-culture zeitgeist, like Flappy Bird. What that shows you is that you don’t need to have 500 people in your company to build a top game. But it certainly helps to have some infrastructure behind you.

GamesBeat: The industry isn’t that transparent. I don’t know if people do have this impression that Clash of Clans and Puzzle & Dragons are making all of the money in the business.

DeWolfe: There’s a lot of money out there, as we all know. It’s all relative. Plenty of companies are doing $200, $300 million a year in revenue, which I think is a lot of money, growing and doubling every year. Compare that with WhatsApp. They did $20 million last year? Not a fair comparison, but –

GamesBeat: And Facebook bought WhatsApp for $16 billion.

DeWolfe: Yeah. Or Snapchat, which isn’t doing any revenue at all. It takes a lot to do a couple hundred million. If it’s a $40, $50, $60 billion industry, and several companies are making up a big part of that, there’s still plenty to go around for everyone else. Again, I mentioned Supercell. They started in 2011. It’s never too late.

GamesBeat: Between King and Supercell, we know they have $3 billion in revenue together. But the mobile industry game estimates say that the industry is about $12 billion worldwide. So they have a good chunk of it, but they don’t dominate.

DeWolfe: Again, this is one of the things that we’re seeing in almost every part of the Internet. If you look at the evolution of games from console to Internet to mobile, and look at social networking from Web to mobile, everything is fragmenting. You went to three years ago for everything – to share your pictures, to check the news feed, to talk to your friends. Now you need to download four or five different apps, which has opened the door for companies like Snapchat or WhatsApp. We’re seeing the playing field level in almost every industry, including the game industry.

Candy Crush SagaGamesBeat: Was there anything interesting to you in the King IPO filing?

DeWolfe: Not a lot, other than the obvious, which is that one of their games accounts for 79 percent of their revenue, and the other two games are 17 percent. They’re fairly heavily concentrated. The other thing that jumped out at me was that they were doing approximately $60 million in revenue for the first eight years in their business, and in the ninth year they went from $60 million to $160 million, and then from 2012 to 2013, from $160 million to $1.6 billion. That’s not phony bot money. That’s $500 million in profit – not EBITDA, profit. The explosive growth, and profitable growth, was astounding. The fact that they’ve been around for so long was surprising.

GamesBeat: And that’s a consequence of staying at No. 1 or No. 2 on the top-grossing list for more than a year.

DeWolfe: It’s a testament to the strategy of building a game as a service, where you’re not just building a game, launching it, and thinking about the next game. You’re taking time before you build that game. You build a prototype to see if it works. You get some positive response back. Then you really go for it. Once you get the KPIs, the day one retention, the revenue per daily user that you want, then you double the size of your team, triple the size of your team. If you do all of that right, you can have a game that lasts for three, four, five, 10 years.

Flappy Bird