Microsoft Settles With Real, Announces Game Agreement

Tech giant and Xbox maker Microsoft has settled with music, video, and casual game company RealNetworks for a $761 million equivalent, regarding a lawsuit filed in December 2003 alleging that Microsoft illegally used its monopoly power to restrict competition in the field of digital media. Microsoft has previously settled similar antitrust suits with IBM, Sun, Time Warner, and the U.S. government. Real had alleged that the bundling of Windows Media Player had unfairly restricted the growth of its own media player software, and the settlement is notable for the video game industry because it includes an agreement to offer RealNetworks' digital games through MSN Games and Xbox Live Arcade for Xbox 360. In addition, the agreement calls for a wide-ranging digital music collaboration between the parties, including promotional and marketing support of Real's leading digital music subscription service, Rhapsody, on MSN properties. Although exact details are not forthcoming, Real will "create a new subscription service to be offered on MSN Games", likely to be similar to the company's current RealArcade monthly game service. Real "will also develop a series of new casual games for Xbox Live Arcade for Xbox 360" - these titles will debut alongside other casual titles from companies such as Reflexive, GarageGames, and Pom Pom, and will be available for purchase directly via Xbox 360 Live's micropayments system, probably for prices between $10 and $20. "Today we're closing one chapter and opening a new one in our relationship with Microsoft," said Rob Glaser, Founder and CEO of RealNetworks. "The legal chapter is being closed with an appropriate and fair outcome that sets the stage for a very productive and collaborative relationship between our companies. By integrating Real's premier music and games services into Microsoft's very popular MSN service, we will reach more consumers today and deliver even better products and services tomorrow."