Internet portal, Yahoo, has announced today the launch if its studio to develop video games for mobile devices. Taking on the $20 billion industry, it hopes to develop games for Verizon Wireless, and expand to other carriers. Acquiring Stadeon, Yahoo plans to create multiplayer games such as chess and poker, allowing consumers to play online against each other through their phones.

Competing with the recently public Jamdat Mobile and private companies such as Sorrent, In-Fusio and Mforma, "Yahoo wants to be part of the party," said Janco Partners analyst Martin Pyykkonen.

Using games as well as email and other services to keep users on its website, Yahoo doesn't anticipates gaming to become a large revenue producer, as Yahoo gets most of its sales from online advertising. Yahoo will also likely target Asia, and more specifically China, for future growth. "My view is that it's more of an Asia opportunity," Pyykkonen said.

Stadeon CEO John Cahill will become Yahoo's director of games in charge of the mobile gaming business.