JAMM AQUINO / JAQUINO@STARBULLETIN.COM The video game Tetris is shown on a mobile phone.

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A California company acquires
Hawaii-based Blue Lava Wireless
in a deal worth about $137 million

Henk Rogers pulled off his biggest deal on the smallest screen.

The founder and chief executive of Manoa-based Blue Lava Wireless LLC had a hard time containing his glee yesterday after his company, which develops and publishes games for mobile phones, was acquired by Jamdat Mobile Inc. for about $137 million in cash and stock.

Henk Rogers: He sought a partnership to increase marketing and sales Big deal Key elements of Jamdat Mobile Inc.'s acquisition yesterday of Blue Lava Wireless LLC: The players: Blue Lava Wireless, a Manoa-based developer and publisher of games for mobile phones; and Jamdat Mobile, a Los Angeles-based maker of games, ring tones and images for mobile phones The cost: $137 million, which includes about $60 million in cash, 4.05 million shares of Jamdat stock and a deferred payment of $13.7 million in Jamdat's choice of cash or stock The employees: Blue Lava Wireless's combined 50-plus full- and part-time employees will remain in Hawaii with the studio. The beginning: Founder and Chief Executive Henk Rogers of Blue Lava Wireless will manage Jamdat's wireless franchise for the game Tetris and will join Jamdat's board of directors. What's next: Jamdat will be able to use its marketing and sales force to distribute the popular Tetris worldwide.

"You have no idea (how exciting it is)," Rogers, 51, said from Los Angeles, where the deal was announced. "I've been in the industry long enough to know how these things work. We made the company so we could eventually do this kind of thing."

Blue Lava's biggest hit so far has been the cell-phone version of the popular Tetris video game, in which players maneuver falling blocks of various shapes into rows.

Tetris, created in the former Soviet Union by Alexey Pajitnov in 1985, is one of the top-selling mobile-phone games in the world, even though it has been distributed only in North America. Blue Planet Software Inc., which Rogers founded in 1996, holds the exclusive business licensing rights to Tetris.

The distribution of Tetris and other Blue Lava games will expand under Los Angeles-based Jamdat, which makes games, ring tones and images for mobile phones. Jamdat will receive an exclusive 15-year worldwide license for Tetris and will immediately begin distributing the game for phones in Latin America and India.

Additionally, Jamdat has acquired the Tetris wireless rights for Europe, China, Japan, Korea, Australia and New Zealand, as the current rights expire throughout 2005. Jamdat also has an option to extend its rights to Tetris for an additional three years after the license expires.

"There is a significant strategic value in this acquisition," said Mitch Lasky, chairman and CEO of Jamdat. "Tetris is a killer wireless gaming application, and together with our existing content portfolio, we believe we will have an unmatched product offering for carriers and consumers."

Rogers, born in Holland, received a degree in computer science from the University of Hawaii before moving to Japan during the early years of that country's gaming industry. There he formed Bullet-Proof Software, a game development and intellectual-property management company, and negotiated to get Nintendo both the hand-held and video-game console rights to Tetris.

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JAMM AQUINO / JAQUINO@STARBULLETIN.COM Blue Lava Wireless programmers Jeverlyne Salvante, above left, and Corey Taira worked at their stations yesterday.

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In 1990, Pajitnov helped Rogers in forming AnimaTek, a U.S.-based computer graphic technology company that pioneered such innovations as automatic animation of characters and computer-generated landscapes.

In 1996, when the Tetris rights reverted back to Pajitnov, Rogers returned to Hawaii from Japan and formed Blue Planet Software to manage the intellectual-property rights for Tetris. Rogers formed Blue Lava in 2002 to create technology for putting games onto mobile phones.

Analyst Kevin Dede, who follows Jamdat for San Francisco-based Merriman Curhan Ford & Co., said the acquisition was part of a trend in the industry.

"The industry is consolidating at a very rapid rate," he said. "You've either got to consolidate or you're going to be consolidated."

Besides Tetris, other games developed and published by Blue Lava include Tetris Deluxe, Blue Blocks, Pinball Dragon and Dell Magazine Crosswords.

Jamdat's games include Jamdat Bowling, Downtown Texas Hold'em, Lemonade Tycoon, the Lord of the Rings, Tony Hawk's Underground and Scrabble.

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JAMM AQUINO / JAQUINO@STARBULLETIN.COM Blue Lava Wireless employees Peter Ryu, left, Kaulana Gilding and Alex Sue conferred at their workstations yesterday afternoon. The Manoa-based company that develops games for mobile phones has been acquired by Los Angeles-based Jamdat Mobile for $137 million.

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"I was looking for a strategy where I would hook up with a company that has stronger marketing and sales than I do," Rogers said. "It never was my intention to go public, so when other people started going public, I would have to compete with public marketing dollars. So if I can't beat 'em, join 'em. But I didn't entertain (offers from) anybody who wasn't going to keep the Hawaii studio."

Blue Lava, which operates out of the state-run Manoa Innovation Center, has about 30 full-time employees and about 20 part-timers. Rogers said the company has outgrown its facilities at the center and is looking to move to another site in Honolulu. Blue Lava plans to hire a few more employees, he said.

Rogers will manage Jamdat's wireless Tetris franchise and join its board of directors. Blue Lava's employees and development team will become employees of Jamdat, which will maintain a studio in Honolulu.

"I think it's awesome," Dede said of the deal. "(Rogers is) in charge of the Tetris brand, and he gets a seat on the Jamdat board. He's got all the critical mass of Jamdat behind him now opposed to one brand."

Rogers said he is looking forward to the opportunity.

"Now that we're part of Jamdat, our job isn't going to be just making products for the U.S. market, but making products for Asia," he said. "We're going to be looking for a few very talented people to help us."

Jamdat will pay about $60 million in cash, 4.05 million shares of stock and a deferred payment of $13.7 million in Jamdat's choice of cash or stock. The company, which went public in September, trades on the Nasdaq Stock Market and closed yesterday at $15.71 before the announcement.