RealNetworks Inc., a powerful Internet software developer that made its name in developing its RealPlayer program popular for streaming video and audio over the Web, is throwing its hat into the gaming arena, but company officials insist they aren't looking to nudge its way into the online gaming sector.
The company today launched its RealArcade, a platform for downloading and playing computer games.
Included in the array of games are racing games, puzzle games and a suite of casino games.
The company says it's targeting a mainstream audience of game buyers online and has worked with more than 40 game developers and publishers on the project--including Zombie Entertainment, GameHouse, WEB Corp. and Daydream Software.
Andrew Wright, General Manager of RealNetworks, said venturing into a full-fledged online casino with its new games is not a goal of the company at this point.
"Not in the short term," he said referring to Real's chances of becoming an online casino. "We know that it is very interesting to people and we get a lot of advertisers that are in that space, but for us as a company, that is not a good area for us to be in right now."
Wright says the arcade has been in development for a year-and-a-half and the focus has always been on selling the games.
"Our charter was to look at new areas for our consumer business," he said. "We wanted to leverage some of our assets into other areas and we decided on games at that point."
In March RealNetworks made the gaming platform available to game developers. Wright said developers have been a target group since the arcade's inception.
"There are two audiences," he said. "There are the developers and the publishers who use it as a digital distribution platform for their game. Then there are the consumers who interact with it as a gaming service."
In preparation for the arcade, Wright says, RealNetworks started a game portal.
"We added a game section to the RealGuide site, which is an entertainment portal," he said. "That site has been extremely successful both financially and in terms of traffic."
The company then realized that the game platform reached demographics in a wide cross section of society.
"What we learned from that site was what type of person was getting the different genre of games," he said. "And they are all different. We have players over 50 getting casino games and players under 25 downloading the strategy games and everything in between with our other games."
Wright says the revenues for the arcade are not based on advertising and that the business plan relies on how many players order the full version of games.
"We know what the business model is and the conversion rates are," he said. "The model works very effectively. It varies from game to game. Some games we give too much value to the free version--and people don't feel they need the full version--and then others we don't give enough value to and people
feel it isn't worth it to get the full version."
The business plan may not be totally reliant on advertising dollars, but Wright did admit that some revenue will be created from advertisements.
"We have learned to refine that process and increase the up-sells very dramatically," he said. "We make money various ways with ads during download and pop-up ads after game."
Intel is sponsoring some of the game titles and is paying on a per-download basis as well.
Small file sizes and virus-free games add to Real's appeal for gamers.
Wright says more than 4 million users have downloaded games from its website in the past year.