Emerging markets offer tremendous opportunity for return -- and, of course, loss. The online gaming world is a case in point: One of the leaders in the space, Jamdat Mobile (NASDAQ:JMDT), saw its stock price plunge 25% to $21.95. Just a few weeks ago, the stock was trading above $30.

In the second quarter, the company reported revenues of $19.3 million, a 128% increase from the same period a year ago. During this time, net income increased from $400,000 to $2.6 million. Although the second quarter's net income factored in a $2.6 million charge for acquisitions, there was also a tax benefit of $1.7 million. Excluding these benefits/charges, net income would've come in at $3.4 million.

Good stuff, huh? Well, Wall Street doesn't really care about the past. Unfortunately, Jamdat softened its expectations. The company forecasted earnings at $0.13 to $0.15 per share in the third quarter; the Street was looking for $0.21 per share.

Interestingly enough, Jamdat has been pursing an aggressive growth strategy driven by acquisitions. Yet, as seen with its tepid growth forecast, the strategy has yet to produce results. Then again, the company is paying premium dollars for franchise content. There was, for example, a deal to purchase Downtown Wireless, which is the developer of "Downtown Texas Hold 'Em."

But the megadeal was the $137 million acquisition of Blue Lava Wireless. The deal provides Jamdat with an exclusive 15-year worldwide license for the wireless rights to "Tetris," one of the most popular games of all time.

Yet the drastic change in earnings guidance certainly raises red flags. Is the company having trouble executing its acquisitions? Is the market softening?

It's tough to tell. One thing is clear, though: The competition is intense. In fact, Jamdat is suing one of its competitors, Jamster, over trademark infringement. VeriSign (NASDAQ:VRSN) is the parent company of Jamster. And, of course, big companies such as Motley Fool Stock Advisor pick Electronic Arts (NASDAQ:ERTS) are just starting to flex their muscles.

Unfortunately, the reduced stock price will hamper Jamdat's acquisition strategy (especially since the company has only $21.3 million in the bank). Unless there is a spike in demand -- or the company launches a breakout game -- the stock may not offer much growth for investors for the rest of the year. As I mentioned in a prior piece I wrote for the Fool, the endgame for Jamdat will likely be selling out. The mobile gaming industry appears to be a landgrab where franchise content is the prize -- one that comes at a stiff price. Given the recent quarterly results, it's probably smarter to sell out sooner than later.

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Fool contributor Tom Taulli does not own shares of any company mentioned in this article.