Why

This regulatory filing is something everyone in mobile games should go to school on. S-1 filings require a company to reveal detailed information. Over and above the requirements, the tone and emphasis of an S-1 say a lot about what a company thinks is important.

Taking a company from an idea to IPO is remarkable accomplishment. The commentary here should always be read in that light. Mostly, you will find the observations here about JAMDAT reflect more on mobile games and the viability of mobile games as a distinct sector than on JAMDAT’s incontrovertible success.

The magnitude of that success is right there in the prospectus summary:

Since commencing operations in March 2000, our revenues have grown to $13.5 million for the year ended December 31, 2003 and $7.0 million for the three months ended March 31, 2004. We had a net loss of $7.1 million for the year ended December 31, 2003 and generated net income of $0.7 million for the three months ended March 31, 2004.

In 2004, JAMDAT will exceed $30M in revenue, and might exceed $40M. JAMDAT is profitable.

An obvious question is “Why sell part of the company to raise more capital when you have turned the corner on profitability?” There are two obvious answers: First, JAMDAT probably has a some need for working capital. Second, this IPO provides liquidity for JAMDAT’s founders and investors.