RealTime IT News
RealNetworks Launches Streaming Video Game Service
By Colin C. Haley
October 11, 2001

In a move with technology and business implications, RealNetworks has debuted RealArcade, an offering that let users to play streaming video games over broadband connections, rather than install software via Internet or CD-ROM.

RealArcade also includes a service where users can rent, on a weekly ($4.99) or monthly basis ($14.99), popular titles such as "Deus Ex," "Driver," "Centipede" and "Monopoly." The first edition launch comes after six months of testing by 2 million participants. As part of a special promotion, some games will be offered for free.

"By providing access to streaming games, RealArcade will be able to offer consumers a new way to experience rich PC games online," said Andrew Wright, RealNetworks' general manager.

The reception for RealArcade will help answer key questions in streaming media industry: Has broadband technology and adoption rates reached critical mass? Are consumers willing to pay for such content?

The market for entertainment software is $14 billion, according to Yankee Group. And the sale of all software sold over the Internet is expected to grow from $2.5 billion last year, to $5.7 billion in 2003. Meanwhile, more than 10 million homes currently have high-speed access, with an estimated 30 percent of homes being plugged in by 2004.

But at the same time, game rentals from video stores and other retailers has dropped as consumers brace for recession. And the sale of so-called premium content by online magazine or music publishers has also been, at best, a mixed bag, depending largely on the uniqueness of the offerings.

RealNetworks isn't the only company with a stake in RealArcade success. Software from privately held Into Networks, of Cambridge, Mass., plays a key role in the system.

To enable RealArcade, game devotees must firm download a small piece of Into Networks software that helps buffer the streaming media as it flows through the broadband connection.

"We are serving the growing, yet largely untapped market of broadband customers looking for applications created to enhance the broadband entertainment experience," said Meredith Flynn-Ripley, Into Networks' president & COO.

Into Networks was founded in 1996 and has raised $62.9 million from institutional and industry backers including AT&T, Cox Cable, Cisco and Intel. Shares of RNWK gained 0.30, or 6 percent, to 5.57 in afternoon trading. In the last 52 weeks, the issue has ranged from 3.26 to 35.2969.