Meet Slade Villena.

In February, the ex-Zynga engineer publicly slammed the door in the San Francisco online social gaming company’s face in this discussion thread on Reddit, although at first he kept his real identity a secret.

With a new seven-person team and a successfully-funded Kickstarter game under his belt, Villena’s a prime example of the sort of independent game developer I wrote about last week. He’s passionate, ambitious and full of big ideas.

But even though he’s adamant about focusing now on a small niche audience, he’s also made a name for himself online directly bashing his old employer.

Welcome to the dark side — or, at least, the gray area– of indie dev culture.

Villena’s Reddit thread three months ago got hundreds of questions and thousands of upvotes, and made Zynga look pretty bad.

But today tomorrow, Zynga — which declined to comment for this article — gets a chance to strike back. In the same section on Reddit, known as IAmA, two Zynga engineers, Seth Allison and Andrew Pellerano, are scheduled to open a Q&A thread at 1 pm PT tomorrow.

So, who do you trust?

When he waxes philosophical about the video game industry, Villena makes some good points. Most interestingly, that competition may be a myth in the indie space, since developers don’t necessarily have to go after a mass audience of, for example, war game-loving teenage boys. But I was surprised by just how much he was willing to put Zynga down, especially since he worked there for only eight months and quit almost a year ago.

And while some of Villena’s points are valid or plausible, Wedbush Securities analyst Michael Pachter said others are “borderline psychotic.”

On the one hand are arguments you’ve probably heard before: That in the pursuit of bigger and bigger audiences, Zynga grinds its employees too hard and pushes them too far.

“I was averaging 70 hours a week because I had to,” Villena said. “They were demanding large spikes and large revenue gains in a very short amount of time.”

He said the heavy workload leads to lots of bugs, and that bugs drive away players. Pachter readily acknowledged that yes, that could happen, but questioned whether Villena was a fair judge.

“He’s probably not spending as much time playing everybody else’s games like I am,” said Pachter. “So, I can tell you that their games are less buggy than most.”

On top of that, Villena alleged a culture of unprofessionalism at Zynga, where long hours were rewarded with trips to Las Vegas and free alcohol for engineers while they worked.

Pachter said he had never observed anything of the sort any of the times he’s visited Zynga, nor had he heard anything about this supposed drinking culture from the 50-odd people he knows who work there.

Putting aside any culture clash on the social front, Villena also alleged that Zynga invades players’ privacy. I asked him to elaborate in our interview, and he compared the games’ use of player data to military-intelligence profiles he observed while serving in the U.S. Marine Corps.

When he was a member of the FrontierVille team, he said, the company posted on the wall the pictures, real names, ages, habits and Facebook posts of some of the game’s biggest spenders.

Creepy? Maybe, if true. But the devil’s advocate argument, of course, is that many social gamers technically agree to give over some or all of that data to game developers in order to use their apps in the first place.

“I was told, ‘We’re getting to know our players,’ but why are you posting their names?” Villena countered. “Why not just post their game’s avatar without having to deal with their photo or their name or anything like that?”

Fair enough. But it’s really when the discussion gets into Zynga’s finances that he starts to sound, to steal Pachter’s words, “a bit unhinged.”

As we were wrapping up our interview, Villena volunteered: “I don’t expect Zynga to survive the summer at the rate that they’re going. Look at their stock, dude. They’re scraping at $7. The way I’m looking at it, by the end of the summer, they’re going to be de-listed from Nasdaq.”

Pachter’s reaction over the phone was, “HA! Ha ha ha! No.“

He later apologized for laughing, while simultaneously calling the idea of Zynga going under this year “the dumbest thing I’ve ever heard.”

Even though Zynga’s stock is at record low levels, under $7 per share, it would need to trade at under $1 per share for 90 days to get de-listed. As for going bankrupt, Zynga is profitable, and doesn’t have any debt.

“And by the way, why the hell does he care?” Pachter asked. “This guy sounds pretty bitter.”

But back to things that matter: Like I said in my last article, gamers don’t have to choose between the games that come out of big companies like Zynga and indie shops like Villena’s Mercenary Game Studios.

Keep an eye on the Zynga engineers’ Reddit thread. In theory, Redditors are supposed to be able to ask them anything, so we’ll see if and how they respond to Villena’s claims.

An earlier version of this article stated incorrectly that the Reddit Q&A would be happening today.

Yesterday, Nintendo reported an annual loss — its first in more than three decades — after revenues fell 36 percent. Hours later, five-year-old upstart Zynga reported nearly the opposite results, saying that first-quarter revenues jumped 32 percent year over year.

“Social, accessible and free are changing things,” said Zynga’s COO John Schappert in an interview. “We were built for this market; we live on free and in-app purchases. We never grew up on $60 games and consoles. It’s a different world, and it’s hard for some companies as they make the transition.”

For more than a year, the game industry has worried about the shift toward social and mobile from more traditional platforms like the home console. And now, after yesterday’s two drastically different financial reports, there is more than anecdotal evidence for concern.

Zynga continues to gain momentum and attract larger audiences with titles like FarmVille and CastleVille on Facebook and Words With Friends on mobile. On the flipside, Nintendo is facing yet another hardware cycle, with consumers waiting for its newest console, the Wii U, coming later this year.

Generally, experts believe that social and mobile games are expanding the overall games market. But yesterday it was hard not to see Nintendo’s first loss in three decades — totaling $531.1 million — as a hint of where things are headed.

Michael Pachter, an analyst with Wedbush Securities, is bullish on Zynga’s prospects but is not optimistic about the future of console games.

“Nintendo is living in the past, repeating what got them to where they are, and hoping that the recent downturn is a fad,” he said. “They aren’t adapting to the times, and it’s hurting them.”

To be fair, the companies approach the market completely differently, so it’s hard to compare the two.

Nintendo sells proprietary portable and home gaming units as well as the games that work on top of them. Meanwhile, Zynga gives away its games for free and lets them work across most computers and mobile phones. It makes money on advertising and microtransactions.

The two approaches lead to drastically different audience sizes.

Zynga said the number of monthly active users playing its games increased to 292 million in the first quarter, up 24 percent. The game company, which got its start on Facebook, is also expanding rapidly to mobile, reporting that it had 22 million monthly users on mobile, up from only 12 million one quarter ago.

Nintendo does not break out quarterly figures, but the number of new customers it reached during its fiscal year pales in comparison. Over the past year, it sold 13.53 million 3DS units, and expects to sell 18.5 million this year. Nintendo sold 9.84 million Wiis over the past year, down 35 percent.

This year, Nintendo is banking on the Wii U to revive the company and to better position itself against mobile devices like the iPad. The new console will come with a 6.2-inch touchscreen that will allow users to interact in a new way with games on TV screens. It plans to sell 10.5 million Wii units this year, including the Wii U.

Last year, Nintendo Global President Satoru Iwata told AllThingsD in an interview that he is not willing to gamble on free-to-play games, because consumers are willing to pay for Nintendo’s superior experiences and brands.

“If we were simply going to say okay, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future, and the entire industry will fold,” he said.

His point is not entirely lost.

Zynga makes far less money per user than Nintendo. In fact, the gap between them is enormous.

Each console or portable game unit Nintendo sells has the opportunity to generate hundreds of dollars in income, since console games cost $60 and portable games cost around $40 (not to mention the initial cost of the hardware).

Meanwhile, Zynga makes very little on each player. It reports a metric called average daily bookings per average daily active users (ABPU). Yesterday, Zynga said ABPU increased to $0.055 in the first quarter from $0.051 in the same period a year earlier.

For Nintendo to switch from one model to the other would be like giving up the farm.

And to be entirely fair, Zynga wasn’t profitable, either. In the first quarter it lost $85 million, primarily due to stock-based compensation.

But it also warned that Tom Clancy’s Ghost Recon Future Soldier, one of the Paris-based company’s big franchise hits, would be delayed by three months, or until its fiscal first quarter of 2012-13.

The game is expected to launch in North America on May 22, and in Europe on May 24, for the Xbox 360 and the PlayStation 3.

Ubisoft said it was expecting third-quarter sales of 650 million euros ($828 million), up 8 percent over the same period a year earlier. That exceeds its previous guidance of 620 million euros ($790 million), which was at the high end of its range.

Two of the games that Ubisoft said performed well during the holidays were Just Dance and Assassin’s Creed: Revelations. The latter faced steep competition from both Activision’s Call of Duty and Electronic Arts’ Battlefield 3. Ubisoft also said it continues to see growth from online sales, which would include social games.

“In continuation of the robust trends recorded for the first half of the fiscal year, Ubisoft reported record-high sales for the Christmas period, exceeding expectations,” said CEO Yves Guillemot, in a release.

Due to its strong third-quarter performance, Ubisoft said it was revising its full-year guidance to 1.08 billion euros ($1.4 billion) on the high end. Operating income before some expenses is estimated to be up to 65 million euros ($82 million), up from the previous estimate of up to 60 million euros ($76.5 million).

Final third-quarter results will be published on Feb. 15.

Wedbush Securities analyst Michael Pachter maintained his neutral rating on the stock, and his 7 euro price target, based on the unclear release schedule and recurring delays.

Ubisoft, which trades on the Paris stock exchange, is currently trading at 5.23 euro.

The NPD Group reports today that in the first quarter of the year, digital revenues totaled $1.85 billion, coming in just below traditional sales of $2 billion.

The estimates were released today ahead of its monthly report coming out on Thursday, which is expected to show another weak period for traditional physical sales due to a lull in big game releases and the less than stellar demand for Nintendo’s new 3DS handheld, according to MarketWatch.

Unlike the estimates released today, the Thursday report only accounts for sales made at retail for hardware, software, and accessories — and not the digital format content distribution, which is currently seeing the most growth.

Zynga’s IPO may be the biggest example of this trend.

The San Francisco company, known for such games as CityVille on Facebook and Words With Friends on mobile, reported revenues of $235.4 million in the first quarter of this year. None of those revenues would be accounted for in the traditional physical channel because they come primarily from microtransactions inside online games.

“While the new physical retail channel still generates the majority of industry sales, our expanded research coverage allows us to assess the total consumer spend across the growing number of ways to acquire and experience gaming, including mobile apps and downloadable content,” said Anita Frazier, an analyst at the NPD Group.

MarketWatch reports that two analysts expect more declines in June after sales slid 19 percent in May compared to the same month the previous year. Doug Creutz of Cowen & Co. wrote in a note to clients that he believes sales will decline 12 percent; Michael Pachter of Wedbush Securities predicted a drop of six percent.

New game releases for June include Duke Nukem Forever from Take-Two Interactive, which received disappointing reviews.

Iwata, who presented the show’s only keynote, said he fears today’s emphasis on mobile and social is going to hurt the industry.

Later in the afternoon, critics said his statements only prove his ignorance and point to the company’s own weaknesses.

“Long-term, Nintendo is doomed,” said Michael Pachter, equity research analyst of Wedbush Securities. “He’s under full frontal assault by Apple.”

In the keynote, Iwata explained the games industry is no longer focused on building the highest quality experiences, but rather is narrowing in on free or very low cost titles.

“The majority of people here are creating games for social and mobile. I fear our business is dividing, and that threatens the employment for those of us who make games for a living,” he said.

Iwata also addressed Apple’s impact on the industry, but without every naming the iPhone and iPad-maker.

The lack of acknowledgment felt particularly strange given that his comments were being made at the exact same time that Steve Jobs was across the street, unveiling the iPad 2, which has all the hardware capabilities in place to become a serious gaming device.

The closest Iwata got to talking about Apple, and probably Facebook too, was when he said that “these platforms have no motivation to maintain the high value of video game software. For them content is something created by someone else.”

For emphasis, he added: “The value of games does not matter to them…The fact is, what we produce is value, and we should protect it.”

[A video of Iwata's entire speech can be viewed on Nintendo's web site.]

Iwata gave the impression that he was oblivious to the burgeoning mobile and social sectors around him, which despite being in their infancy, are generating significant revenues and attracting large audiences. Together, they both have the ability to define the future of gaming.

“He may be right, but then the 200 to 300 million people who play games on Facebook are wrong,” said Jeff Brown, the VP of corporate communication for Electronic Arts  ”Social gaming as a whole aggregates into a business that is undeniably big money.

“When it’s that big you are forced to pay attention,” he added.

Among the large publishers, EA’s ahead of the game when it comes to preparing for the day when consumers switch from paying $60 for an Xbox title to paying a few bucks or nothing at all for an iPhone or Facebook game. Yesterday, it furthered its commitment by expanding its third-party publishing platform into social and mobile through its acquisitions of Chillingo and Playfish.

So far, it’s paying off.

EA’s digital business was up 39 percent in 2010 and its on track to hit three-quarters of a billion in revenues this year.

Zynga, the undeniable leader on Facebook, also took offense to the statements.

Zynga’s Chief Game Designer Brian Reynolds, who came from the traditional games business and was lead designer on the big hit Civilization II, was especially baffled by the comments about being able to make a living in social.

Last year, Zynga hired more than 800 people and today has more than 1,500 full-time employees in 13 offices, spanning six countries.

“I expected better from Nintendo. They are missing the point of what we are doing,” he said. “We are making games that everyone can play and socialize on while playing.”

What’s more, Zynga is doing a great job monetizing, he said.

Sources tell BoomTown’s Kara Swisher that it’s close to completing a funding round of $500 million, valuing the company at $10 billion –making it worth more than EA’s $6 billion market cap. In 2010, its revenues were rumored to total $850 million.

“We do it in a microtransaction way, and it’s free to play, but they’re wrong that they don’t make a lot of money,” Reynolds said.

The gaming industry has always been fraught by disruption.

In the past, the storyline has been about the consoles wars with Microsoft, Nintendo and Sony all going head-to-head to be the gaming leader. Now, it’s about the platform wars with consoles vs. mobile and social.

How quickly do things change.

It was only a year ago at GDC that Zynga seemed to piss off everyone when accepting an award on behalf of Farmville for best new social/online game.

In a similar manner as Nintendo today, Bill Mooney, the general manager for Farmville at the time, used his acceptance speech to make the argument for why everyone should leave console gaming for social games. He even solicited resumes at the podium.

Mooney’s overtness was translated as lack of respect for the traditional games business, which is what seemed to bother people the most.

What’s different with today’s platform wars vs. yesterday’s console wars is that this time, it’s not about one beating another. It’s about expanding the market opportunity for gaming. Ultimately, if you give people a choice of platforms to play on, more people will play.

Reynolds said while Zynga has made huge gains since last year, it still hasn’t been fully recognized for its work.

“What we’ve done has permeated everywhere, but we don’t have the recognition from the old guard. The young guys — they get it, but the forces of the industry are living in the past. The longer it takes them to realize that, the more it will cost them to buy your way back in.”

As for whether Nintendo is wrong or right, and whether it will have to pay heavily down the road to get back in, we’ll have to wait and see.

The rest of Iwata’s hour-long keynote was spent promoting its upcoming 3DS launch at the end of the month.

Today, Nintendo’s North American President Reggie Fils-Aime announced a partnership with Netflix to offer streaming video.

It also formed a partnership with AT&T to give internet access to the handheld gaming devices wherever it operates WiFi hotspots.

Webush’s Pachter said despite the pressure from Apple, he believes the 3DS is novel and has the ability to sell tens of millions of units, but it will face competition from the iPod and iPhone, which have similar games and much lower prices.

EA’s Brown also wouldn’t count them out. “The instant you stop thinking they are relevant, they turn the industry upside down.”

And today, GameStop (GME), the industry’s dominant pure-play retailer, got an upgrade from BB&T Capital Markets.

BB&T analyst Anthony Chukumba upped his rating to Buy from Hold, with a $32 price target. “After a brutal 2009 and early 2010, we believe GameStop’s fortunes have taken a turn for the better,” he writes.

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“In our view, the company’s share price fully reflects an increasingly positive outlook and the lack of other company specific catalysts,” he writes.

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Pachter concedes that the call could be early given cautious guidance from the company, but he thinks the forecast is already in the share price. And he thinks the current level disregards a potential new version of Grand Theft Auto in the October 2010 fiscal year.

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Now, Disney (DIS) and CBS (CBS) already offer those same shows for viewing on the same day-after-original air date schedule on their own Web sites (though they aren’t presented commercial-free as they will be on Netflix). But that doesn’t seem to matter to Netflix (NFLX), which is clearly positioning itself as a one-stop shop for online delivery of movies and television shows.

And doing quite well at it, I might add. Wedbush Morgan Securities analyst Michael Pachter estimates that between 10 and 20 percent of Netflix’s 8.4 million subscribers use the company’s streaming service regularly.

There’s still no official printed notice from Netflix. You can see the company’s comments in an interview Bloomberg conducted on Friday.

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