RealNetworks Spins Off Casual Gaming Division

RealNetworks Spins Off Casual Gaming Division


RealNetworks has announced plans to spin off its casual games business into a separate company, and may mark the new venture with an IPO.

The company made the decision public as part of its first-quarter financial results, according to, which showed profits at $2.4 million, down precipitously from the previous year's mark of $40 million. But over the same period, Real said revenues for its game business rose 33 percent year-on-year to $31.8 million, representing 21.6 percent of the $147.6 million total quarterly revenue. Shares in the new company would be distributed to its shareholders, and the company is "considering" an initial public offering of up to 20 percent of the new shares.

"RealNetworks was a pioneer and has been a leader in the casual games industry since we introduced RealArcade in 2001," said RealNetworks CEO and Chairman Rob Glaser. "We believe that spinning off our casual games business will give it the best opportunity to continue to flourish and lead."

"Today's announcement demonstrates our commitment to create long-term value for RealNetworks' shareholders," added Michael Eggers, CFO of RealNetworks. "For investors, we anticipate that the spin-off will create a pure-play casual games business with increased transparency, and that it will result in lower complexity in understanding and tracking RealNetworks' performance. We also think that the new structure will provide current and potential shareholders with two attractive investment options that may be more closely aligned with their various investment objectives."

Founded in 1995, RealNetworks is best known for the RealAudio and RealVideo compressed media formats, and its RealPlayer media player. Along with RealArcade, the company also operates Rhapsody, an online music service launched in 2001. The new company has not yet been named, according to a Seattle Times report, but is expected to remain in Seattle.



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