Blog Post

Jamdat Sale Rumors Creep Again; Microsoft and EA Among Possible Suitors

by Rafat Ali and Staci D. Kramer: Jamdat Mobile Inc., the LA-based mobile gaming company rumored to be for sale during the last few months, is the subject of renewed speculation, according to multiple sources. Jamdat reports its Q205 earnings tomorrow (conference call at 4:45 PM EST, here) The stock is moved up nearly $2 a share in regular trading today to $29.30, giving Jamdat a market cap of about $725 million. Add in the expected premium and you’re talking about $900-$1 billion, possibly more. Keep in mind, Jamdat earned $2.7 million in the first quarter on revenues of $15.1 million. The crown jewels are Tetris, Bowling and Bejeweled, licensing deals with the NFL, NBA and the NHL; and a three-year, multi-country exclusive development/distribution deal with MLB for wireless simulation games.

Usual suspect Electronic Arts is still in contention, but a new and unlikely but intriguing name is cropping up in rumors: Microsoft. News Corp.’s new Fox Interactive Media has been tossed around but FIM’s name is used everywhere these days. FIM bought an online gaming company when it acquired Intermix, and there’s no reason to believe this News Corp. unit is interested in a mobile gaming company, particularly one with Jamdat’s probable price range.

We’ve heard various schools of thought: EA is still the best fit, but this might be too big and too expensive might be expensive for their size. EA needs the talent, not the bulk of the content.

On the Microsoft side, there’s at least three divisions where Jamdat could work: the mobile division, the Xbox division, and the MSN division. Each of these could be a good fit. For the mobile division in conjunction with MSN, it could mean a distribution push. For the Xbox division, it could mean trying to bridge the gap between console games and mobile games. What makes this even more interesting potentially are recent moves at Microsoft towards tying various consumer entertainment areas under the strategic direction of Robbie Bach, SVP- Home & Entertainment Division, chief Xbox officer and co-leader of the Consumer Leadership team. Of course, a $1 billion sale price is about a week’s worth of cash flow for the company.

We’ll keep you updated as we find out more and, of course, we’ll have Jamdat’s 2Q05 earnings.


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