Speaking before joining a panel I moderated, at the UK government’s C&binet forum in London on Tuesday, he said the reports were “a byproduct of the excitement our industry is generating out there.”

Segerstrale said Playfish is both profitable and cash-generative. London-based Playfish, which draws game players to its in-Facebook titles like Pet Society and Restaurant City, appears to have cracked the virtual goods micropayments market. It sold four million non-existent, digital flower bouquets on Valentine’s Week, Segerstrale said, each costing $0.05 and $2.50.

Playfish has raised around $21 million from two funding rounds and, as my colleague Tameka wrote this month, “the social-gaming space is ripe for a major acquisition” as physical game sales gear up for decline and publishers must buy in to social, online casual gaming.

“We continue to grow at hundreds of thousands of new users per day,” Segerstrale asid on the panel. Pet Society has over 20 million active monthly users, he said - “that’s nearly double the size of World Of Warcraft”. “Of everybody who has ever installed Pet Society over the past 14 months, more than half played in the last 30 days.”

While Playfish’s games are mostly free to play, it’s the virtual items, like furniture and clothes, that it’s charging for. “It’s just like flowers in the real world - you don’t buy them because of the physical thing that is the flower, you are buying them because of the emotional experience of gifting the flower that somebody else is going to value.”