RealNetworks moves on games e-market

RealNetworks yesterday launched RealArcade, its attempt to leverage its massive streaming media user-base to sell games via the Internet.

RealArcade provides games developers and publishers with a mechanism to offer online and offline titles. Games companies will either sign up with RealNetworks to offer their product through its games portal, or license the back-end technology to deliver titles themselves.

The system appears to work along the lines of online operating system updaters, like Apple's Software Update and Microsoft's Windows Update. Punters select a game, pay for it, download a small installer app that pulls the game's code and datafiles across the Net.

The snag here is the phenomenal size of games these days, which can easily fill up a 650MB CD-ROM, compressed at that. RealNetworks' answer is an offshoot of its video compression technology which it claims can cram games into downloadable units 20-50 per cent smaller than existing compression schemes.

Then again, with users happy to download the latest update or demo, which can easily weigh in at 50MB or more, perhaps there's less resistance to massive downloads than you might think. Broadband Net connections will still be de rigueur, though.

RealNetworks is also pushing RealArcade's scope for managing the automatic installation of games patches and updated. Presumably there's some kind of anti-piracy element in there too, such as online-registered serial numbers, which isn't going to please the online privacy lobby too much but is clearly the way the technology is taking the market.

The appeal for developers is clear: like the nascent digital music market, it allows them to cut out the middleman and save media and packaging costs. It could also allow smaller developers to bypass publishers' profit-siphoning contracts.

The deal for Real is that it either builds up traffic to its own sites - using the portal model to provide a one-stop shop for gamers and thus grab all those advertising dollars as and when companies start advertising online again - or makes a fortune selling the software that makes it all work. Commercial streaming media hasn't taken off, so the company needs to seek out new revenue opportunities. What better than the games biz, which is worth a staggering $7 billion?

RealNetworks is providing games developers with access to RealArcade and the technology behind it right now, but the end user launch won't take place until sometime next quarter. The company claims it has the support of over 40 developers and publishers, but while there are some well-known names in the current roster, it nevertheless lacks the backing - so far - of the Electronic Arts, Infogrames and Id Softwares of this world. ®