Mobile games coming of age?

On the heels of EA's giant acquisition of Jamdat Mobile, the mobile-games industry is holding its breath and seeking huge growth.

SAN JOSE, Calif.--Electronic Arts' purchase of mobile-games publisher Jamdat last December, its biggest-ever acquisition, served notice to a game industry that has been slow to adapt to the massive proliferation of mobile phones around the world.

As EA goes through the laborious process of integrating its $684 million purchase, (click here for PDF), one thing is becoming increasingly clear: Even in mobile gaming, it's going to get a lot harder for the little guys to compete with the giant publishing houses like EA.

At least that's the word from the EA executives at GDC Mobile, the two-day mobile-games event being held here this week in conjunction with the Game Developers Conference.

And they make a strong argument: They have a graphics-rendering engine that allows them to build games across different platforms. They have deep pockets to spend the money needed to create increasingly complex games for everything from the Xbox 360 to the smallest mobile device. And they have the marketing clout small publishing houses can only envy.

"I believe you're going to see a picture 18 months from now," said Robert Tercek, founding chairman of GDC Mobile, "where the mobile-gaming market consists of major console game publishers who have all acquired a mobile-game shop, and online game publishers, who have extended their online games to mobile, and a dwindling number of standalone, pure-play mobile-game publishers."

Of course, the trick will be making all of the pieces come together, and there are certainly no guarantees when big companies buy up small ones--whether it's big game companies like EA or big software companies like Oracle doing the buying.

EA execs, to no one's surprise, think they're getting close to the formula that's going to let them play in their traditional console and PC business, as well as in the growing mobile-game business. And mobile gaming, they seem to think, is where the next big opportunities--and perhaps the most interesting fights--are going to be for game publishers.

Though mobile games, which are already a $2 billion business, have for several years presented a huge growth upside, the rapid deployment of phones with high-quality screens and cameras and the ability to play MP3 audio means publishers can aim games at devices that already rival circa-1995 desktop computers and that will soon reach the processing power of the first PlayStation, Tercek said.

The growth potential in a mobile market in which 800 million phones are sold annually can't be overstated, he argued.

EA's enviable position
To EA, meanwhile, purchasing Jamdat was an expedient--if expensive--way to gain dominance in the mobile-game publishing arena, said Mitch Lasky, senior vice president of EA Mobile and formerly CEO of Jamdat.

He said that the acquisition was at least five times larger, in dollars, than any previous acquisition in EA's history.

Prior to the purchase, EA had already been trying to make a go of mobile games and wanted to be the market's top dog, but it had been unable to overtake Jamdat.

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