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RealNetworks' Game Revenues Drop 9% In 2010

As it cuts both employees and expenses, RealNetworks reported that its Games division (GameHouse, Zylom) saw a 9 percent FY revenue drop to $111.4 million, but $4 million in divisional profits.
Along with its overall revenues falling by 28 percent to $401.7 million in 2010, media and gaming firm RealNetworks reported that its Games division also saw a 9 percent revenue drop in the previous fiscal year (ending December 31) to $111.4 million. For the company's fourth quarter in 2010, that unit saw a 6 percent gain in revenues over the previous three-month period, picking up $27.2 million, but that number is 11 percent lower than the $30.7 million it earned during the fourth quarter of 2009. The Games unit saw its annual profits, however, shoot up to $4 million, compared to its loss of $38 million last year. For the fourth quarter, its profits reached $1.8 million, versus $2.4 million in Q3 2010 and a loss of $910,000 in Q4 2009. RealNetworks as a whole has been shedding staff in recent months as it tries to restructure into long-term profitability, with its most recent loss being about 130 positions, or 10 percent of its workforce. The company's Games segment includes revenues from "games licenses, online games subscription services, advertising on game sites and social network sites, games syndication services, microtransactions from online and social games and sales of mobile games." The Games division, which is known for its GameHouse casual game site as well as Zylom and Atrativa, collectively reaching more than 60 million monthly users, recently announced its acquisition of Canadian social game developer Backstage Technologies. Overall, the company expects "a small decline" in revenue in 2011, with the exception of its Music business, due primarily to "the elimination or de-emphasis of products and services that generate low-profit or unprofitable revenue." "Earlier this week, we took the final major step to restructure RealNetworks," explains RealNetworks CEO Robert Kimball. "We believe we have created a stable and efficient base upon which we can build for growth. We expect to utilize our strong consumer and mobile carrier distribution channels and innovative technologies and services to play a leading role in improving how people use and enjoy their digital media."

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