RealNetworks tries to grow casino games as Zynga drops gambling
RealNetworks Inc., the company that makes the RealPlayer streaming software, is betting it can revive its casual games business with the help of its casino games on Facebook.
The casino arm, which features games including video poker and blackjack, is part of the Seattle company’s GameHouse division. The company is trying to get more users and increase engagement by launching GameHouse Casino Plus, a monthly sweepstakes in which users can enter to win $100,000.
Rob Glaser, founder and interim chief executive of RealNetworks, said casual games are a difficult business because there are many competitors and all the games are essentially the same. The sweepstakes, open to users in Washington, D.C., and 31 states including California, could help GameHouse stand out, he said.
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“Most of the time, they are pretty standard games,” Glaser said. “You can innovate around the games by creating a new source of excitement.”
Starting in August, players can enter the drawing with tickets they can earn from winning the company’s games. In states where the cash prize is not available, users can win virtual coins, Glaser said.
Glaser had stepped down from RealNetworks in 2010 at a time when the company’s stock was trading at less than $4 a share, compared with a decade earlier when it was trading at $88.87 a share. Glaser returned to the company as interim CEO last year to help turn around the company.
Shares of RealNetworks, which has seen its revenue fall for four straight years, closed Tuesday at $7.64.
Its gaming business has struggled. In its most recent quarterly earnings report, the company said games revenue fell 27% year-over-year to $13.9 million, and it posted an operating loss of $1.74 million for the first quarter.
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Glaser acknowledges that his company is a relatively small player in the casual games space that includes Zynga Inc. and King.com. Casino games are just a part of RealNetworks’ overall games business, which includes PC and Mac titles players can download.
Zynga has also struggled to grow its own casino games business. Zynga’s free-to-play poker game has seen its bookings decrease and the company last week also said it will not pursue a gambling license in the U.S.
RealNetworks has said in the past that it would spin off the games division, but Glaser said he wants to get the business on a growth trajectory before deciding what to do with it. “When you have growth businesses, you have a lot more options,” he said.
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