RealNetworks buys Dutch game company

Deal worth $21 million will add to media company's growing "casual game" business.

John Borland
John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
2 min read
RealNetworks is expected to announce Tuesday that it has purchased a Dutch game company, adding to a stable of "casual" computer games that is contributing a steadily growing share of the company's revenues.

The $21 million acquisition of Zylom Media Group will push RealNetworks heavily into the European market, matching a similar casual game push in the United States during the past two years.

The company made more than $40 million from its downloadable games business in the first three quarters of 2005. It will announce its year-end results next week.

"Because of all the competitive dynamics, our music business gets more attention, but games has definitely ascended in importance," RealNetworks Chief Executive Officer Rob Glaser said. "We're thrilled to join forces with the Zylom guys."

The casual game market remains financially a small sector of the broader video game business, attracting a demographic that is coveted by many other game sectors. The proportion of woman in particular who play these fast, simple games such as "Hearts or Solitaire" tends to be much higher than is true for console or retail PC games.

Glaser said that his company's games audience tends to be about 65 percent female, and up to 70 percent in some countries.

RealNetworks has expanded its game business through acquisitions in the past, purchasing Seattle production studio GameHouse for $35.6 million in 2004, and the European mobile-phone game company Mr. Goodliving for about $15 million in 2005.

It also plans to distribute the games to Xbox 360 users in the future, as part of last year's antitrust settlement with Microsoft.

The company provides some games for free through its RealArcade site, but charges a $7.99 monthly subscription for access to its broader game catalog.

Zylom generated about $7.98 million in revenue last year, with a net profit of about $750,000, RealNetworks said.