Will Gamers Go for a Subscription Model?

Streaming media software maker RealNetworks is taking the old-fashioned book
club commerce model into the Internet age, launching a subscription-based
games service for its online RealOne Arcade game site.

The Seattle-based company said the
subscription service, called GamePass for RealOne Arcade, will make it “easy
and economical” for consumers to acquire new games on a regular basis.

It works like this: consumers who sign up to pay $6.95 a month (there’s a
three-month membership commitment) receive one credit each month toward a
free game download, which they can then use to acquire any of about 90 game
titles in the RealOne Arcade catalog.

Members also receive a $5 discount for any additional games purchased during
that month. Once a game is acquired through GamePass, members may keep it.
Games sold through RealOne Arcade are priced between $9.99 and $19.99.
Subscribers to RealNetworks’ RealOne core media delivery service can join the
game program for $4.95.

Membership is not required for purchases of game downloads, but is offered in
addition to the site’s individual game sales.

How much this will add to the company’s revenue stream is unclear, but
anything is sure to help. RealNetworks shares were pounded last week when the
company said it would post a loss in the current quarter because of weak
corporate demand, despite assurances from CEO Rob Glaser that the company’s
consumer business remains strong.

RealNetworks closed out the week at $4.07, well down from its 52-week high of
$12.47. The company said revenue is expected to be between $42.5 million and
$45 million for the second quarter ending June 30, lower than the $47.2
million reported for the first quarter. Net loss is expected to be 1 to 2
cents per share in the second quarter.

Launched in May 2001, the arcade site claims that consumers have downloaded
more than 5 million copies of the client software, and more than 20 million
individual games – most of them free. About 700,000 games have been sold to
RealArcade users, the company said.

Competition includes GameSpy and
from AtomShockwave.

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