RealNetworks' Glaser puts on a game face

SAN JOSE, Calif.--With the market for delivering digital media over the Internet getting ever rougher, streaming media giant RealNetworks is looking to computer games to give the company a new market to play in.

RealNetworks CEO Rob Glaser introduced the gaming industry to RealArcade, the company's bid to become an alternative publisher of computer games, in his keynote address Saturday at the Game Developers Conference here. The company began experimenting with downloadable games last year by offering a games section on the Real.com site.

RealArcade will be a new vehicle for getting PC games to consumers, Glaser said, providing developers with tools for creating compact, download-friendly titles and giving consumers an online mall where they can try a variety of games and buy titles they like for download.

While any software writer with a Web connection can make his code available for download now, RealArcade will give developers technical and marketing advantages over current download formats--including workable copyright protection to avoid the Napster free-for-all surrounding digital music.

"Distribution has to be based on legal rights, or you get hosed," Glaser said, while giving Napster credit for demonstrating what consumers want from digital content. "People love instant gratification, and they love free samples."

RealArcade, set to launch in a few months, will also give a leg up to smaller game developers by giving them an alternative to traditional publishing and retail conduits that seldom reward innovation, said Jason Hall, president of game developer Monolith Studios. Hall's company is one of the first to sign up for RealArcade distribution.

"This is a new opportunity to try something really creative," he said.

Making money from small, downloadable games is a different matter, though. While online games are a growing market, the vast majority of players gravitate to free options such as card games on Yahoo.

A bigger handicap may be that RealArcade will only offer PC titles, while the vast majority of gaming revenue comes from games for consoles such as Sony's PlayStation 2, where content is only available on discs. Glaser tried to minimize that shortcoming.

"Digital distribution is going to come to consoles," he said. "But if you want to be ahead of the curve...you've got to be on the PC now."