Jam Session: Electronic Arts and Jamdat Join Forces
Electronic Arts (ERTS) just dropped $680M to buy Jamdat (JMDT).It was a good move.
Barely 5 years old, Jamdat's been profitable from the get-go.
Mobile gaming is a $2.6 billion market and Jamdat possesses 25% market share.
Some have called the acquisition "expensive."
We think EA picked up JMDT at a bargain special -- 8 X this year's sales.
Whatever you think the right price should've been, EA now has access to JMDT's visibility & impressive portfolio of gaming titles.
If it wasn't Electronic Arts, someone else would've picked up Jamdat, namely a Yahoo (YHOO) or an Activision.
EA's timing couldn't have been better, furthermore: The ARC Group estimates that by 2010 consumers will spend more than $10 billion a year downloading games onto their phones.
The cellular industry is maturing to the point where it behooves key players to find newer avenues of growth & profitability.
Since only 40% of cells are game-enabled, there's massive room for EA to capitalize on Jamdat's platform.
Rumor on the Street has Gameloft (GLOFF.PK), another wireless gaming company, pegged as the next one to go.
Gameloft still trades on the pink sheets, so don't jump into it without doing your homework.
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