RealNetworks to Spin Off Games Business

RealNetworks announced today during their quarterly report that it plans to spin of its games business into a separate company, with the possibility of an initial public offering.

RealNetworks is a leader in the casual games industry worldwide, with a vertically integrated development, publishing, licensing, distribution and retail business. Their games business started on the PC but over the years has expanded into mobile as well, where they are now a top 10 mobile game publisher in the US.

In the first quarter of 2008, RealNetworks' (NASDAQ:RNWK) games business revenue rose 33% from the first quarter of 2007 to $31.8 million. For 2007, games revenue was $108.5 million, up 26% over 2006.

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

The company anticipates that spinning off its casual games business will result in two more flexible and focused companies. In addition, the separation will provide the games business an "industry-specific currency" for future acquisitions and enhance its ability to attract and retain the best talent in the industry.