RealNetworks Inc. announced plans to join the crowded mobile gaming playground, acquiring European publisher Mr. Goodliving for $15 million in cash.
A 40-person company based in Helsinki, Finland, Mr. Goodliving has enjoyed success with mobile titles like “Trivial Pursuit,” “MetalSmash Pinball” and the “Playman” series of sports titles. RealNetworks expects the acquisition, which officially closed last week, to generate $3 million for the rest of this year and $8 million in 2006.
The move is an extension of the company’s RealArcade, a casual gaming portal that generated more than $12 million in revenues in the first quarter. RealNetworks, which helped pioneer streaming audio and video software, will integrate Mr. Goodliving’s business with GameHouse Studio, an Internet game developer and publisher that RealNetworks acquired last year.
One key to the deal was Mr. Goodliving’s Emerge platform, which allows developers to efficiently port titles to different handsets in different languages, according to Martin Plaehn, head of RealNetworks’ games business.
“(Emerge) is a development methodology-a database of methods that enables the rapid publication of game variations so they can all run successfully on their targeted handsets,” Plaehn said. “I think it’s important for a player like RealNetworks to have a very powerful suite of compelling games that are available very quickly on the broadest set of devices. When a new wave of handsets comes on the market, at launch or very shortly afterwards, our entire game portfolio can be available on all those handsets.”
RealNetworks has dipped its toe in the mobile waters before-Jamdat Mobile Inc. has produced versions of GameHouse games like “Collapse!” and “Text Twist” for wireless handsets, and the company has quietly been developing other titles in-house. Mr. Goodliving will remain in Finland under Juha Ruskola, who will move from chief executive officer to managing director.
An initial offering of 20 wireless games is slated, four of which will be drawn from GameHouse’s PC offerings. RealNetworks plans to expand on Mr. Goodliving’s European operations as it taps markets in Asia and the United States.
While wireless game makers like Jamdat, Mforma and Sorrent have established firm footholds in the industry in markets around the world, RealArcade’s substantial consumer base and portfolio of titles might help it close ground quickly. And it seems the only thing growing faster than the number of players in the industry is the industry itself.
“They’ve already got the following in terms of customers, and they’ve already got the content in terms of the brand,” said Dave Mock, an analyst with CurrentOfferings.com. “I don’t think their coming in late hurts them at all. I think they let somebody else figure it out; find out what works and what doesn’t.”
The acquisition is the latest by a well-heeled outsider moving into the wireless gaming space. Giants like Electronic Arts and Yahoo! have aggressively launched mobile gaming operations in recent months, and analysts expect more behemoths to lumber onto the dance floor.
“Some people look at mobile gaming as an area in itself, but for a lot of media companies, it’s just another medium,” Mock said. “It makes sense that you’re going to see companies from all different areas coming into publishing wireless stuff.”
Although the Mr. Goodliving acquisition was fairly minor in terms of finances, there’s no doubt that RealNetworks has the resources to be a player. The company has nearly $370 million in cash and short-term investments, according to recent securities filings, and has solid carrier relationships due to its mobile media software. With such deep pockets, it’s likely RealNetworks will be active as the industry continues to consolidate.
“(Mr. Goodliving) certainly seems like it’s just one small piece of what Real can build up,” Mock said. “It’s all a matter of being a global player now.”
