Tim Merel, corporate finance director for games and other sectors at IBIS Capital in London, sees lots of action coming in the video game industry as it expands to become one of the biggest entertainment industries in the world. He just released a 60-slide review of the global opportunities for investing in video games. He looks at everything from funding to merger opportunities throughout the industry, from console games to social games.

And here is what he has to say about the MMO sector and browser MMOs in particular:

- The MMO sector is interesting in that it’s both high growth and consolidated, while still being cash generative. It remains an early stage market with evolving dynamics, but there is a clear hierarchy of successful business models. High end retail MMO offers significant rewards, yet remains as hit driven and risky as the pure console sector. The businesses I like most are subscription and in-game item/micro-transaction supported (like Bigpoint) which have already delivered significant revenue and profit traction. The trick here is “game balancing” to ensure that the players who spend the most don’t spoil the game for free players.

So in conclusion, if you are going to put your time and money in some part of the games industry, browser MMO is the best place to be!

GamesBeat: Investment banker sees big growth in game investment and mergers as industry fragments