Verizon Wireless and Sprint, two of the biggest U.S. mobile providers, plan to offer their customers video games from Electronic Arts Inc., the companies said on Monday.
Electronic Arts shares were up slightly on the news, while shares of rival JAMDAT Mobile Inc. which specializes in mobile games, saw its shares drop more than 4 percent.
"It indicates a potential for increasing competition against JAMDAT," said Moors & Cabot analyst Jason Willey. He said the Electronic Arts deals were not surprising but may have dampened recent rumors that the company might buy JAMDAT.
Willey estimated that JAMDAT leads the U.S. mobile gaming market with a 15 percent to 20 percent share, while Electronic Arts has a share of less than 5 percent.
Mobile phone gaming is one of the fastest-growing segments of the video game industry, and service providers are embracing wireless game downloads as a additional source of revenue.
Top video game provider Electronic Arts had already said it plans to launch 15 to 20 games for mobile phones this year, with expectations for up to $25 million in revenue.
Verizon Wireless the No. 2 U.S. mobile service, a venture of Verizon Communications Inc. (VZ.N: Quote, Profile, Research) and Vodafone Group Plc (VOD.L: Quote, Profile, Research) (VOD.N: Quote, Profile, Research), plans to offer games such as Madden NFL 06 and NBA Live 06 through its VCast high-speed service in the coming weeks.
Sprint, the No. 3 U.S. mobile service, said it would soon offer popular Electronic Arts games including Tiger Woods PGA Tour 06. Source