Real Networks losses deepen on legal costs

The digital media firm posted a net loss of $5.3m for the three months to December, up from a loss of $2.5m in 2002, on revenue that rose 17% to $54m. However, the net loss figure included a charge of $1.6m related to the litigation. Excluding this item net loss was $3.8m.

RealNetworks also hinted at a higher-than-expected first quarter loss this year, between 3 and 4 cents a share, due to an estimated $3m expenses relating to the ongoing antitrust suit.

The company announced in December that it had filed suit against Microsoft for allegedly abusing its monopolistic power by bundling Windows Media Player with its operating system and stifling competition in the digital media market.

Excluding litigation expenses, RealNetworks said in a statement that it expects to return to profitability by the end of 2004.

The company managed to reduce its full year net loss during 2003 to $21.4m, down from $38.3m in 2002, on revenue up 10% at $202.4m, up from $182.8m.

RealNetworks' CEO Rob Glaser said: "2003 was the year when digital media consumer services crossed into the mainstream."

He highlighted that the company had over 350,000 subscribers for its Rhapsody digital music service at the end of the year, and also hailed the success of its games service, RealArcade, which has sold more than two million games.

Earlier this week, RealNetworks announced an agreement to acquire games developer GameHouse for $35.6m in cash and stock to boost its RealArcade platform.

GameHouse is best known for creating electronic versions of classic games such as Solitaire and Mahjong, as well as puzzles and word games, and generated over $10m in revenue and $5.5m in net income last year, according to Real.

27 January 2004:

7 January 2004:

19 December 2003:

"www.realnetworks.com ":http://www.realnetworks.com

"Email us about this story ":mailto:editorial@netimperative.com