RealNetworks, a provider of streaming video and audio codecs, has announced its financial results for the fourth quarter and full year of 2005. In the fourth quarter, revenue increased 15% over the same period in 2004: earnings were $86.3 million compared to last year's $72.5 million.
The company's downloadable gaming revenue was a particularly healthy part of that, with the division earning $15.7 million for the quarter, a 52% improvement over Q4 2004. Overall, profits for the quarter were $295.6 million, compared with Q4 2004's loss of $1 million, largely due to winnings from an antitrust lawsuit against Microsoft.
RealNetworks' game division, which has RealArcade as its main distribution point, both distributes casual PC games from third parties such as Bejeweled
developer PopCap, and develops/distributes its own game titles through its GameHouse and Mr. Goodliving development divisions. A particular differentiating factor is its GamePass system, which offers one game every month for a $6.95 subscription fee, and discounts on buying other games. RealNetworks is also continuing significant mobile game development, with the announcement of a Gorillaz mobile game made concurrently with the earnings.
Earnings also rose for the full year, with a total of $325.1 million up 22% from 2004's $266.7 million. Revenue from the games department was $56.3 million, a 63% improvement over 2004. Profits for the year were $312.3 million, compared to 2004's net loss of $23 million. As a result of the news, the company's shares were up 15.27% to $8.53 per share.
"2005 was a watershed year for RealNetworks," said RealNetworks CEO Rob Glaser. "We achieved record annual revenue, returned the company to profitability, settled our antitrust litigation in a manner that generated significant shareholder value, and dramatically grew our games business through both organic growth and acquisitions. We believe these achievements position us well for long-term growth and market leadership."