Investor website Motley Fool has posted an article about the precipitous drop in the price of
Jamdat shares. The stock is now trading at about $20 (at the time of this writing), that's a humongous drop from the
$30 level that the shares were trading at a month ago.
Why should any of us care? What's this have to do with the games? Well, this hinders the company's ability to be the mobile entertainment gorilla that Jamdat wanted to be. The company's strategy had been to acquire one company after another in the hopes that one of these acquisitions would result in big sales of games. Jamdat paid $137 million for a company that had exclusive rights to publish the wireless version of Tetris, for instance.
Writes the Fool, "The mobile gaming industry appears to be a landgrab where franchise content is the prize — one that comes at a stiff price."
Now let's connect the dots. With a lower share price, Jamdat will be able to make fewer big acquisitions of the content that the company sees as its ticket to mobile dominance. So instead of acquiring name-brand franchises, the company might be forced purchase titles from the bargain bin.
Call us crazy, but we're looking forward to the day when the wireless games space has evolved to the point where companies don't feel that a franchised game is the only way to make money. Tired retreads of the same old same old may work for the mass market, but not for more sophisticated gaming tastes.
