Hi there, I'm going to respond as someone who is in the same boat as you are, recently graduating with an Associates in Recording Arts, focusing in Game Audio.
First off, The Aaron Marks book mentioned above is pretty much the bible in the Game Audio community, he (and many other famous sound designers) contributes not only practical information, but theory, and down to earth descriptions of how to handle certain situations. It's an easy read, very eat to digest, and very well written. Oh, also, anything by The Fat Man usually is taken as to be the highest of truths. (just google The Fat Man, you'll find what I'm talking about).
Moving forward, when I gradated (with honors) I thought I was gods gift to the gaming industry, and boy was I mistaken. Since many companies as of late have forced by budgetary constraints to lay off their audio team. Then, they (the game studio) usually end up contracting the same people anyways, just for a lesser cost, as outside contracted work. This makes it difficult for newcomers to find employment in the game industry. Whats more, 2-4 years in college, in fact, does not really give you enough time behind the tools you really need to master in order to flourish making games. For example, my Recording Arts course put me in front of ProTools a lot in the music recording, mixing, and post-production setting, which was fantastic, I learned how to navigate ProTools pretty effectively, learned a whole bunch about frequencies and the Hass effect and doppler and envelopes and gain structure and pitch and phase and timbre and resonance, etc etc etc. I also received some training with programs such as Peak Pro, and Sound Miner, however, I only received about two weeks of FMOD (audio middleware) training. While I did pick up FMOD Designer and Sandbox quickly, the lack of actually being able to make a working build and pass it off to the programming team (how do you do that anyway!?!) didn't help, and neither did not having a finished product to point prospective employers to. What I've found is that simply completing sound asset list assignments doesn't compare to the grueling grind of active game development and the twists and turns and heartbreaks and sweat and tears that it entails.
What I've learned from GDC and AES and from talking on forums such as this one, is that you must start at the bottom and prove yourself as you struggle your way up the ladder. (Again, I am only commenting as someone who is in the same situation as you). Currently, I am contributing (for free) to four separate game mod projects. The place I found these gigs is moddb.com, and indiedb.com, under the "jobs" tab over on the right. These are great websites that host and showcase mods done by teams who build games simply because they love to, and aren't financed by any larger corporation who would publish and release the game. For example, the project I just got hired on, called Renegade-x, is a remake of Command and Conquer Renegade from the early 2000's. Right now it is a mod for UT3, but they are acquiring new talent in order to re build it in UDK and provide a highly polished, stand-alone product. http://www.renegade-x.com/site/ (shameless, I know, but excited to be on this team) :)
Anyway, I digress
I would highly suggest doing some mod work, you'll be pleasantly surprised to find out how many of your favorite games are the host platform for some pretty impressive mods, with teams that are usually groups of people spread throughout the world, with other "real-life" jobs that keep them busy, and usually families, all coming together for the sake of making something great that the gaming community will appreciate and cherish for extending the life of that franchise ever so slightly. All for free.
Also, as a final note, as I work on these projects, I'm asking the team members to teach me certain programs (such as UDK's audio interface) that I never learned in school order for me to be a more valuable asset to the team, and make myself more hirable in the future. Also, I'm considering focusing mysely into audio programming, rather than straight sound designing, or composing. I asked a question on here not to long ago about just that, and from what I read, the industry needs good, quality audio implementers who want to do just that. I'm trying to relearn FMOD, and other programs such as Wwise, XNA, UDK etc...(I think the Crytek engine is public now too, I believe?) That's an incredible engine that will be churning out some fantastic games in the future.
Oh, and also check out the 'Global Game Jam', and see if you can get in one next year. It's a two day game design crunch mode held usually in a school or studio where participants stay up for 48 hours designing a small game, all designed around the predetermined common theme or topic. Teams from all over the globe participate, and at the end of the 48 hours, you submit to a central source and are judged and awarded and hosted on the Global Game Jam webpage. Sound designers are a rarity in these competitions, and although you'll be getting your butt kicked for 48 straight hours, you'll build some potentially great relationships with fellow game designers.
Sorry about the long post, but I hope this helps, and good luck with your career.
