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RealNetworks shuts down internal games studio

85 staff laid off in Seattle and Europe as 25 per cent of execs feel the axe

RealNetworks has announced a "significant reorganisation" of its business and operational structure, resulting in the closure of its games development division.

The company has consolidated its Technology Products and Solutions and Media Software and Services business units and re-organised them into three separate teams focused on product development, sales and marketing, and service delivery.

As a result around 85 positions have been let go, including around 25 per cent of the company's executives. The company has also reduced its office space in both its Seattle headquarters and in Europe.

According to website Gamasutra victims of the layoffs include the whole of the company's internal games division, which was responsible for games such as Super Collapse and Little Shop.

The website's source suggests that only the company's game portal and Facebook games development team will remain, and that the company will still maintain relations with second-party developers. However, the source further speculates that the RealGames name will be sold at a later date.

As a result of the reorganisation RealNetworks is expecting restructuring charges of around $10 million for the financial quarter ending June 30. Around $7 million of this will be recorded as a loss on excess office facilities.

"This reorganisation marks a significant milestone in our transformation of RealNetworks," said president and CEO Bob Kimball. "Restructuring RealNetworks into functional groups creates a far more efficient organisation focused on developing great products that can be delivered through any of our distribution partners."

Update: RealNetworks has refuted the suggestion that the internal game division is to close entirely, although the company is discontinuing the RealGames name in favour of its GameHouse brand.

PR manager Tiffany Dunning told GamesIndustry.biz that, "GameHouse will continue making traditional casual downloadable games, in addition to the company’s ongoing commitment to mobile games and increased focus on social games."

"GameHouse continues to invest in exclusive, new and existing IP content through the efforts of its first party studio in Eindhoven as well as global publishing and distributing relationships with developer partners," she added.

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David Jenkins