Real Networks Spins Off Casual Games Unit

Real Networks has announced plans to make its casual games division into a separate public company, although it still faces many official hurdles. The company also announced that it might make an IPO of 20 percent of the shares in the new outfit.

Real Networks has announced plans to separate its casual games division from the rest of the company, spinning it off into a separate public company, with stock going to Real shareholders, and might precede the breakup with the offer of 20% of the shares as an IPO.   In a press release, the company said that the spinoff “will result in two more flexible and focused companies. In addition, the separation will provide the games business an industry-specific currency for future acquisitions and enhance its ability to attract and retain the best talent in the industry.”   However, there’s many a slip between announcement and act. The separation still has to be the board of directors, and after that “completion of the transaction will be subject to a number of factors, including the effectiveness of a registration statement, the receipt of a favorable letter ruling from the Internal Revenue Service, the receipt of an opinion of tax counsel, market conditions, as well as the execution of inter-company agreements and other matters.”   That said, Real is anticipating filing documents with the SEC by the end of 2008.   The games division is big business, representing 21.6% of the company’s first quarter revenue, with sales of $31.8 million according to the Seattle Times. Real Networks had a net profit for the quarter of only $2.4 million, far below the $40 it reported for the same period in 2007, but it made a final payment of $61 to Microsoft in an antitrust settlement.