Video game giant Electronics Arts said Thursday it’s buying mobile games maker Jamdat Mobile, the name behind popular games like Tetris, for $680 million in a move to expand its reach in the mobile gaming market.

The gaming software company will pay $27 per share in cash for Jamdat’s common stock, representing a 20 percent premium over Jamdat’s closing price of $22.45 on Wednesday.

The news came after the market closed. Jamdat’s stock jumped $4.28 or about 19 percent to $27.05 in after-hours trading, while EA stock fell $1.41 to $54.34. EA will also assume Jamdat’s outstanding stock options.

“Together we intend to build a leading global position in the rapidly growing business of providing games on mobile phones,” said EA CEO Larry Probst about the acquisition.

Redwood City, California-based EA and Los Angeles-based Jamdat together plan to publish more than 50 games for mobile phones in the first 12 months following the completion of the acquisition. The deal is expected to close in EA’s fiscal fourth quarter, which ends on March 31, 2006, and is subject to regulatory approval.

This acquisition marks the official entry of the No. 1 game maker into the fast-growing mobile gaming market. The U.S. mobile gaming industry is expected to be worth $500 million in 2005, up 44 percent from $345 million in 2004, according to research firm IDC estimates.

Long-Term Strategy

“By acquiring Jamdat, they acquire the skill set, resources, and relationships [to compete in the mobile gaming market],” said Shelley Olhava, analyst at IDC. “This is a long-term strategy for EA where they see the wireless gaming market with great potential.”

Trip Hawkins, who founded EA in 1982, is now the CEO of mobile gaming company Digital Chocolate and widely promotes “mobile social applications” (see Trip Hawkins Has Gone Mobile).

The move to expand into mobile gaming, EA’s second major one this week, suggests it is taking the mobile market very seriously. The company, maker of hit console games such as The Sims, Madden NFL, and Harry Potter, signed a deal with an Indian mobile gaming company Wednesday to expand its games into Indian mobiles phones (see EA Lands on Indian Cell Phones).

EA’s bread-and-butter business is to make games for consoles such as Sony’s PlayStation, Microsoft’s Xbox, and Nintendo’s GameCube—a market that IDC estimates at $10 billion in the United States.

Jamdat has about 350 employees and has made popular mobile games such as Tetris, Bejeweled, and Jamdat Bowling.