Jamdat is a global publisher of wireless entertainment applications, including games, ring tones, images and other entertainment content. Their applications are designed to take advantage of multimedia enhancements in the latest generation of mobile phones. The company licenses, develops and sells both single players and multi-player games. The customers typically purchase the applications from their mobile phone carriers and are charged a one-time fee or monthly subscription depending on the applications. Jamdat also offers a limited number of PC and PDA products that may be purchased through Internet portal sites and at retail locations.
The wireless entertainment market has emerged as a result of the rapid growth and technological evolution in the wireless communications industry. During the introduction stage of the industry, Jamdat's sales are generally made to the early adopters who have the latest generation of mobile phones with multimedia capabilities. The demand of wireless applications depends on the availability and market penetration of mobile handsets enabled with advanced technologies such as BREW and Java.
Currently, only a limited number of wireless subscribers have the capability to download their entertainment applications. As Jamdat is operating in a developing industry, its success depends on growth in the number of wireless subscribers who use their mobile phones to access data services and, in particular, entertainment applications. If this market does not continue to grow, the business growth and future revenues could be limited.
To reach a larger numbers of wireless subscribers, Jamdat adapts a low penetration pricing strategy to build market share and invests aggressively in research and development to keep pace with the shortening mobile phone model life cycles. The complexity and incompatibilities among next-generation mobile phones and wireless technologies in the rapidly evolving environment require them to use additional resources for application development.
The wireless entertainment applications...