RealNetworks, Microsoft in Mortal Kombat?

The future of gaming has to loom large if some of the top technology
companies are vying for purchase among Sony’s scared village.

Just days after weighing in at the Electronic Entertainment Expo (E3) gaming
conference with promises to improve the gaming landscape, RealNetworks Inc.
and Microsoft, made some noise about their media players. Well known for
their legal jousts and attempts at media player one-ups, it seems the two
also sit on opposite sides of the gaming fence. RealNetworks Wednesday made
clear its support for PlayStation 2 when it agreed to lend its RealPlayer 8
and other client technologies to the hallowed gaming system ands its
software development kit.

This will do two things: add another 10 million customers to the leading
RealPlayer customer base and enable PlayStation users to check out sports,
breaking news and entertainment on the software application. This agreement,
for which financial details were not disclosed, comes in stark opposition to
Microsoft, which is ramping up its Xbox console RealNetworks didn’t stop
there. It also offered its player to Nokia’s Media Terminal, making its
presence even more ubiquitous.

It’s part of Real’s strategy, really. It’s called “Rolling Thunder” and it is
the company’s way of moving its presence beyond the PC to other devices such
as net appliances and perhaps even personal digital assistants, to reach
users on the go. After all, there is a serious market there; IDC estimates
there will be over a billion users of home appliances and mobile devices by

Mark Bretl, vice president of consumer appliances at RealNetworks said that
because RealPlayer has the flexibility to meet demands on any device and on
any platform, it will seek to reach more than just PlayStation 2; namely, set-top
boxes, Web top devices, home entertainment systems, and gaming platforms.

While RealNetworks is clearly the leading media player supplier, it also
turned what was once a dabble in online gaming with its game site
into a full-on arcade: RealArcade launched Monday at the E3 conference amid some fanfare.
RealArcade is a free games service that offers consumers the tools to find,
acquire, manage and play games on their PC. The company launched the service
with 120 games from more than 40 top developers and publishers.

Sound eerily like a Microsoft move? Perhaps it is. Microsoft has spent the
last year inking deals with luminaries such as Electronic Arts (EA) and
scooping up game developing companies, gleaning whatever talent and game
titles that catches its eye in an effort to be the Nintendo or Sony of the
gaming future. Indeed, some experts believe as much as 70 percent of homes
in the U.S. will have some kind of gaming console by 2005. And akin to
RealNetworks’ gaming announcements, Microsoft Monday trumpeted Xbox once
again (it can afford to, of course, and has not been bashful with its plans
to spend $500 million to market the console in 18 months) when it showed up
at the E3 conference in Los Angeles to announce prices for its ballyhooed
product. Microsoft went on record Wednesday by saying Xbox would be on the market by Nov. 8 for $299.

All of that may be fine for RealNetworks, which is not in the business of
making hardware anymore than Microsoft seems to be gearing up for a music
subscription service the way Real has been for the past few months. At
Jupiter Media Metrix’s last count, RealPlayer was still the leader with
about 37 million at-home and work users to Windows Media Player’s tally of
roughly 30 million total users.

Still, Microsoft soldiers on. It’s not far behind in media player user
numbers the way, say, Apple’s Quicktime is (about 10 million). Wednesday
Microsoft upgraded its media apps to version 7.1 across the board; its
Windows Media Player, Windows Media Encoder and Windows Media Software
Development Kit (SDK). By offering updated content creation technology for
the recording of audio and video, Microsoft hopes to sway more consumers to
its side.

While both companies are on par with the latest versions of their chief
entertainment software apps, it will be interesting to see where they go
from this point on. Are they shadowing each other, or not? Will Real
continue to help Sony in its fight against Microsoft? While this future is
unclear, it is almost a sure bet that Real and Microsoft will continue to up
the ante for entertainment over the Internet.

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