Yes I think the internet has already begun producing dominating markets that would be impossible to succed in. Online games is defiantly one of those.
However picking a niche and putting a spin on yours with the right marketing could work out. A lot of work will still be required.
Here's an idea for you. What about a pub games site. The idea could be you only add games like pool, darts etc. There's a lot of pubs that have their own personal websites. You could create a web component for them to easily add your pub games. Each pub could battle for top scores.