RealNetworks bets on social casino to halt continued gaming decline31st October 2013 7:58 am GMT
Rob Glaser, interim CEO of online media distribution and services provider RealNetworks, said Wednesday that he expects future social casino launches to help return the company to growth, but admitted that the business has “a lot more work to do” to achieve these aims after third quarter gaming revenue fell 24 per cent.
Games revenue fell by 24 per cent from Q3 2012 to $11.4m, a quarter-on-quarter decrease of 12 per cent, due to lower subscriptions and unit sales across its entire games business from traditional PC games to mobile and social apps. Adjusted EBITDA loss for games more than doubled year-on-year, rising from $1.3m in Q2 2012 to $2.7m.
This followed the launch of two new social casino products in August, with GameHouse Casino Plus going live globally, and Golden Dreams Sweepstakes (allowing players to win cash prizes) rolling out across 32 states, covering approximately 60 per cent of the US population.
August also saw RealNetworks finalise the acquisition of New Jersey-based games developer Slingo, with the company currently working on the launch of a new range of mobile social games based around the Slingo mechanics.
“Based on where we are today, I would say we've made some progress. We have a lot more work to do,” Glaser explained. “In sum, we believe that our recently announced and upcoming product offerings will set up us for a durable return to growth and profitability for each of our 3 businesses and, therefore, for RealNetworks as a whole.”
Total group revenue of $49.0m represented a 17 per cent decline from takings of $59.1m in the third quarter of 2012, leading to a net loss of $31.4m for the three-month period. However, this was attributed largely to exceptional costs relating to two litigation matters which were settled for an aggregate cost of $11.5m.
RealNetworks; chief financial officer Tim Wan was unwilling to elaborate on what each case related to, but said that they were “unusual cases” for the company, and that he does “not anticipate this level of litigation expense in the foreseeable future.”
Revenue from the company’s mobile entertainment division contributed most to quarterly revenue, though takings of $19.9m, represented a 13 per cent year-on-year decline, while online content distribution arm RealPlayer group saw revenue fall 18 per cent to $17.6m.
Despite the decline Glaser said he was pleased with the company’s “continued progress towards revitalizing RealNetworks.”
Shares in RealNetworks Inc (NASDAQ:RNWK) closed yesterday at $8.38 per share in New York, up 0.119 per cent in trading.