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Electronic Arts, the largest publisher of video games for consoles, on Thursday moved to extend its dominance to games made for mobile devices with the $680m acquisition of Jamdat Mobile.
The announcement came as Electronic Arts warned that sales of video games in the important holiday shopping period of late November to early December had been softer than expected.
Warren Jenson, EA’s chief financial officer, said the Jamdat deal would immediately boost EA’s presence in the mobile gaming market, which is seen as a driver of future growth.
“Most in the world today can’t afford a $300 game console,” he said. “But many have a cell phone and can afford a game.”
Jamdat has become the biggest name in the market of games for mobile phones, with titles such as Tetris, Bejeweled, Jamdat Bowling and Downtown Texas Hold ‘Em. Rumours that it might be bought by a leading publisher have circulated for months. News of the deal sent shares in Jamdat up more than 18 per cent to $27 in after-hours trading.
EA has been focusing on converting many of its titles to mobile versions over the past two years as well as expanding into “casual” games along the lines of Tetris, which is responsible for a third of Jamdat’s revenues. Mobile gaming has been slow to take off in EA’s home territory, with only 18m players in the US compared to 170m worldwide, according to one industry estimate.
Lawrence Probst, EA’s chairman and chief executive, said Thursday’s deal would help speed the company’s efforts to bring new mobile gaming titles to market.
EA on Thursday said it planned to publish more than 50 games with Jamdat in the first 12 months following the completion of the acquisition, including its own popular sports titles such as FIFA soccer and Madden NFL.
EA will pay $27 per share in cash for Jamdat, a 19 per cent premium over Thursday’s closing price, for a total of $680 million. The deal is expected to close in EA’s fourth quarter.