The Short Names

RealNetworks (NSDQ: RNWK) is diving deep into the mobile applications business.

Today, the company’s games division is launching a new program that is designed to help small developers get on thousands of handsets being sold by hundreds of carriers around the world. The goal of the program is to increase the developers’ sales without having to do a ton more work. RealGames will do all the heavy lifting by porting, or re-developing the game for many handsets. Then, they will use their connections with carriers to get the game into a lot of sales channels.

RealNetworks says it is not asking for any upfront payments to participate, but will take a cut of revenues. Charles Harper, RealGames’ general manager of business development, said from their experience, 85 percent of mobile game sales are still occurring through the carrier, and not through the higher-end app stores, like Apple’s. “It’s conservative, if anything,” he said.

The first partner that has signed up for the program is Sonic Boom, a developer of mobile games and applications, including such titles as “Name that Tune!” and “Virtual Villagers.”

RealGames is calling the program the Federation of Studios (FoS), which uses a proprietary development platform called EMERGE. Real acquired EMERGE along with Helsinki-based Mr. Goodliving, a mobile game studio, in 2005.

Developers will have to learn how to use EMERGE and will have to build every app at least once in the platform. From there, RealGames says it can port it to 1,700 handsets on eight different operating systems and then sell it via 130 carriers and direct-to-consumer distributors—that’s a staggering amount for small developers, who wouldn’t have the resources to do it on their own. The list of carriers include large operators in North America, Europe, and the platform supports handsets, such as the iPhone, BlackBerry, Windows Mobile, as well as, J2ME, BREW, Nintendo DSi and Flash devices.

While there’s other platforms out there that promise to port applications to multiple platforms, Harper says Real’s program is particularly appealing because they will not only port the games, but will use their connections to get the game into the best retail channels. “We are seeing a constriction of the business. Carriers are consolidating their relationships, and severing relationships with developers. They want to get their content from a fewer number of partners. You can create a great game and still not make your money back. Our concern is that there’s a lot of great content and there’s a lot of developers who aren’t going to be around in a year from now because the barriers to entry are phenomenal.”

Harper would not say how much money Real will take off the top for providing its services to the developers. Apple (NSDQ: AAPL) has somewhat set a standard by giving developers 70 percent and keeping 30 percent for their own. Harper: “The revenue split could vary.” Is it similar to Apple’s? “They’ll find it far more advantageous than that.” The reason why the split could vary is because if a developer wants to market the iPhone game themselves, Real will not charge an additional amount for that platform. Or, if they already have a relationship with a particular carrier, or have ported the game to numerous platforms, then it will be different, too.

Harper said RealGames will only be looking for a few partners to join the program at first. “We will look at portfolios and experience, but it can also be a guy in a garage. If we are going to invest time and technology, we don’t want to do the one-offs.”

In May 2008, RealNetworks announced that it will spin-off its global casual games business into an independent company, but said at the end of last year that it was pushing out the date indefinitely because of the poor economy. The spin-off does remain a part of the company’s long-term goal.