Just when you thought the Facebook gaming sector couldn't get any more competitive, another report comes out saying things have tightened even further.

Lazard Capital Markets released a report based on meetings with a half-dozen privately held social and mobile gaming companies: CrowdStar, Digital Chocolate, Funzio, HeyZap, IGG, and Tapjoy.

The company's conclusion on established players, such as Zynga and Electronic Arts is:

Other takeaways from the Lazard report are:

• The competitive landscape for Facebook games seems to be getting tougher, with rising customer acquisition costs and declining virality of the platform.
• Monetization on Facebook games seems to be improving, driven by growing awareness and growing comfort level of users with spending on virtual items.
• Given the tougher competition on Facebook, companies note that they have to either  find a niche market (such as female audience, hardcore gaming audience) on Facebook, or look for opportunities to expand on other platforms such as mobile.
• Opportunity for the hardcore games seems lucrative, given a meaningfully higher lifetime value and relatively limited competition in the segment.
• Social-mobile games opportunity also seems lucrative given relatively faster growth, better engagement and monetization metrics, and a relatively level playing field on social-mobile compared with Facebook.
• Discovery remains one of the biggest challenges for games on mobile devices, suggesting opportunity for a game-centric platform on mobile.
• The biggest opportunity for long-term growth is cross-platform games.