RealNetworks unveils games-subscription service

Monday, July 1st 2002, 12:00 am

By: News On 6

SEATTLE (AP) _ Internet audio and video company RealNetworks plans a Monday launch for a new games-subscription service called GamePass that allows users to pay a monthly fee and receive free or discounted computer games to download.

The service is part of a makeover of its RealArcade game site, now renamed RealOne Arcade, which offers users free software to play games as well as a selection of more than 140 free Web-based games and 90 downloadable games for purchase.

Modeled after RealNetworks' other popular subscriptions, GamePass allows users to pay a monthly fee of $6.95, which will give them a credit to buy one new game a month and get $5 off the purchase of additional games. The RealOne Arcade site will continue to offer a collection of free games and free demonstrations.

But RealNetworks faces obstacles in trying to persuade its target audience _ the regular gamer as opposed to hard-core users _ to pay money, said IDC senior analyst Schelley Olhava. Also, the subscription program is confusing and will need to be marketed very clearly to consumers, she said.

It's one of several experimental efforts by companies in tackling the nascent online games segment, she said. The U.S. games space, worth about $300 million in 2002, is projected to be worth as much as $41.8 billion in three years, including subscriptions for both PC-based and console-based games as well as advertising and sponsorship revenues, she said.

``Everyone is trying out different business models,'' Olhava said. ``This is all still very much new territory.''

Microsoft and Yahoo! are among the other companies running game Web sites.

The GamePass also reflects how effective subscriptions have been in drumming up income for Seattle-based RealNetworks, which provides software and services for audio, video and other media on the Internet.

The company already offers monthly subscriptions to consumers for downloading new music, watching exclusive news channels and viewing sports games over the Internet. Since RealNetworks launched consumer subscriptions less than two years ago under the name GoldPass, subscriptions have grown to nearly 25 percent of its total revenues.

The company warned Wall Street last week that revenues, largely from business clients, will be lower than expected for the second quarter that ended Sunday. The company reported $47.3 million in revenue for its first quarter, which ended March 31.