RealNetworks to enter mobile gaming

RealNetworks is getting into the mobile gaming business, announcing this week that it has bought Mr. Goodliving, a Helsinki-based publisher of casual gaming titles for mobile devices.

RealNetworks is looking to extend its success in downloadable games in the wireline Internet into the mobile space and possibly reinvigorate its lackluster mobile entertainment catalog. While Real enjoyed initial successes in selling its Helix streaming servers to carriers and getting its RealPlayer software onto millions of handsets, it has faced challenges from other software providers, particularly Microsoft. Meanwhile, its mobile content business led by video streaming service rTV has flopped. If RealNetworks can establish a foothold in the fast-growing gaming sector, it could breath life back into the business.

Mr. Goodliving currently develops and publishes casual gaming titles for carriers throughout Europe, but RealNetworks plans to build on its initial catalog of games and extend its reach into the U.S. and Asia. The transaction closed earlier this month with Real paying $15 million in cash. The gaming unit is expected to produce $3 million in revenue for the remainder of 2005 and $8 million in 2006, RealNetworks officials said.

While RealNetworks' RealArcade downloadable games service and GameHouse Studios publishing group have done extremely well, generating more than $12 million in revenue in the first quarter, the company said it does not plan to merge Mr. Goodliving into the business unit. Rather it will keep the company as a wholly owned subsidiary. All of Mr. Goodliving's companies will stay on in Helsinki.