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[Promaginy]

Is it possible to oversaturate a market when the customer is not directly paying for anything?

All of the web-based games allow players to play for free. The only thing that is being saturated is the demand for player's attention, but that has always been a challenge.

Its a good question, but I don't think so. The crash in 1982 was due in part to an abdication of quality control by Atari. Because they had no standards and nobody else was a worthy competitor, the system imploded and had to be reborn again. The web/flash market would be faced with the same problems if a central body was controlling which game sites surfers could play.

[mike]

Is it possible to oversaturate a market when the customer is not directly paying for anything?

Well, don't be so sure.
The player is supposed to be paying for products and services that are rendered by the advertisers.
The advertisers need the people who see the ads to purchase what they are selling.

If this doesn't happen then the advertisers aren't able to afford the ads.
If they can't afford the ads, developers don't get paid.

-Mike

[Promaginy]

Well, don't be so sure.
The player is supposed to be paying for products and services that are rendered by the advertisers.
The advertisers need the people who see the ads to purchase what they are selling.

If this doesn't happen then the advertisers aren't able to afford the ads.
If they can't afford the ads, developers don't get paid.

What you describe is the natural ebb and flow of the marketplace. It prunes the less desirable games since those businesses can't attract the customers.

Advertising dries up because businesses cut back on their advertising, not because of a glut of too many games which is the basis of your post. I am just not seeing the link that you were suggesting.