Is your cat an indoor, or outdoor cat (or both)? It might be the result of a animal fight, and a bacterial infection in the dermis.
It also might be fleas. My cats had similar looking scabs when my cats got fleas. Last summer our flea population was intense, and even using frontline the fleas were everywhere. I'd check for flea dirt as the scabs can form from the cat biting, rubbing, and itching. Also check the ears, fleas love to hide in the ears during the day.
You might consider shaving the area down to treat it better (if you're cat allows it), and wear gloves when you clean that wound, as many skin ailments like ringworm, can be transferred to other pets and to humans. Clean in a circular motion working from the inside out, like a target, and throw away your tools after as to not spread the disease. A vet visit sounds good if you can afford it.