Game-Maker Gets Real With Web Streamer

RealNetworks Inc. is entering into a definitive agreement to acquire Seattle-based GameHouse, Inc. a top developer, publisher and distributor of downloadable PC games, it was announced late yesterday. The $35.6 million deal strengthens RealNetworks’ leadership position in the downloadable PC games market by bringing together RealArcade, a downloadable games distribution platform and developer GameHouse. Moreover, this acquisition contributes to RealNetworks’ overall strategy to be the leading provider of digital media consumer services.

"When we launched RealArcade two-and-a-half-years ago, we pioneered (an) approach to downloadable PC games that appealed to a broader market than traditional CD-ROM or console games," says RealNetworks’ CEO Rob Glaser. "We believe that the merger with GameHouse will strengthen our lead in this vibrant business." To date, RN has sold over 2 million games through the RealArcade platform. For its part, GameHouse has sold one million copies of their tiles through a combination of RealNetworks’ distribution channels and other Internet outlets.

"We created GameHouse with the goal of establishing a successful business that would bring entertainment to millions of people," adds Garr Godfrey, GameHouse CEO. "RealNetworks essentially created the industry for downloadable casual games and we are excited to be joining the industry leader."

Based in Seattle and founded in 1998, GameHouse has consistently published many of the top casual games on the Internet, including: Super Collapse II, Puzzle Inlay, and TextTwist. GameHouse distributes these games through its own direct-to-consumer web site (www.gamehouse.com), through third party affiliates, and through distributors that include Comcast, Earthlink, Pogo.com, MSN, RealArcade, Shockwave, Sony, and Yahoo! In 2003, GameHouse generated over $10 million in revenue and $5.5 million of net income. RealNetworks and GameHouse expect the transaction to close in the next two weeks.

GameHouse will operate as a wholly owned subsidiary of RealNetworks, GameHouse Studios. GameHouse Studios will continue to distribute games through its network of distributors, and RealNetworks will continue to provide access to a wide variety of games from other publishers through RealArcade. All GameHouse employees are expected to join RealNetworks and they will remain in their historic Seattle Pioneer Square location. Garr Godfrey, will become general manager, GameHouse Studios, reporting to Andrew Wright, vice president games.