Amazon.com is a master at merchandising. So you might think that its recent entree into the casual games business would cause some alarm amongst other online distributors of puzzle, strategy and card games. Or, maybe not.

At the WTIA gaming panel this evening in Seattle's SoDo district, leaders of Big Fish Games, WildTangent and RealNetworks were somewhat dismissive of Amazon's latest foray. Moderator Frank Catalano asked if the move threatened or legitimized their businesses, which certainly got the panelists' blood boiling.

"You got to be kidding," said WildTangent Chairman Alex St. John. "Microsoft, AOL and Yahoo -- three of the largest portals on Earth -- have been doing that for years.... Amazon.com came to the market very late with the same business model, the same content and the same price point. Their impact is negligible compared to the enormously entrenched large portals. The large portals, however, have been losing their audience pretty steadily over the years and they are losing their audiences to us."

Big Fish Games founder Paul Thelen then jumped into the conversation, saying he's learned a lot over the past decade about what casual gamers want.

"It takes more than launching a few games on a portal to really make a business," said Thelen. "I've been doing this for 10 or 11 years now in the casual space and every year I think there has been the comment 'what are you going to do now that insert very large company here is entering your space.' It is business as usual. It is a tremendous focus on the customer. We've been doing this a lot longer and with a lot better service than what they are offering."

That prompted Harold Zeitz of RealNetworks to point out the differences between simply buying a casual game and being part of a larger community. For the most part, Zeitz said that casual game players are "expecting an experience."

"It is well beyond just selling a game. That's not to say that Amazon won't go beyond that in the space, but their expertise really is a merchandiser as a purveyor of a transaction and a purchase," said Zeitz.

The panelists agreed that mobile devices are becoming a much more accepted platform for consumers, though Thelen and St. John offered a few notes of caution about game development on the iPhone.

"The way you merchandise on an iPhone is a mystery to everyone who builds for the iPhone. You don't control the store experience," said Thelen.

St. John followed that up by saying that mobile gaming is great for consumers but a "crappy business." 

"Apple will ultimately, just as all of the carriers do, suck all of the profit off it ... and as a consequence there will be a very small amount of room for a lot of small developers and not a lot of opportunity in the middle," said St. John. "I actually don't think mobile gaming is all that compelling." In fact, St. John doesn't think there is much money to be made on social networks like Facebook either.

"I think it is a non opportunity," he said. "I have a lot of VCs at WildTangent who ask me the same question all of the time. And I go 'I don't know, it is crappy games that people are playing for free for low CPM advertising.'"

St. John has been known to stir the pot, offering his theory once again tonight on the coming extinction of the gaming console.

"I think the economics of gaming, they are fundamentally going to be online experiences. I don't think they are going to be on the console. I think you might not see more consoles after this generation," he said. "And I think they are going to be advertising and micro currency based economies, a lot like Asia."

Following up on his TechFlash guest post earlier this week, moderator Frank Catalano asked panelists for their views on whether gaming companies are recession-proof. Zeitz conceded that it is "unusual times," but he also noted that the low-cost nature of casual games appears to be holding up well. St. John agreed, saying that $5 to $7 game is an inexpensive alternative to going out to dinner. 

Thelen, whose company employs 350 and currently has 35 openings, sees the recession as an opportunity to grow market share. And, with Microsoft cutting staff at some of its gaming operations, he said there could be opportunities to pick up talented people.

Even though Big Fish has seen a slight uptick in customers defaulting on credit card payments, that has been outweighed by the overall growth in the business.

"If you have a solid business model you can emerge with greater market share and greater strength from a major recession," said Thelen. "If your business model is somewhat tenuous or flaky, you will not survive."