(L-R) RealGames President John Barbour with Yahoo veteran Jeffrey Revoy, new vice president of social games; former Mpire CEO Matt Hulett, chief revenue officer; and former MySpace exec Wilf Russell, new chief technology officer. (Dan Schlatter/PSBJ Photo)

RealNetworks’ video-game division, trying to position itself to survive on its own, is bolstering its executive team with MySpace and Yahoo veterans, and changing its approach to its ultra-competitive corner of the industry.

The moves are meant to put RealGames on a more solid footing following two years of deep financial losses. RealNetworks wants the games unit to operate separately as part of the parent company’s broader effort to streamline its business after founder Rob Glaser stepped down as chief executive. RealGames is slated to run independently inside RealNetworks this year, but executives say they don’t foresee an actual spinoff in 2010 unless market conditions improve.

Inside the RealGames unit, one of the primary goals is to tie together the experience of using the company’s games across social networks, computers, the web and mobile devices. Executives say the idea is to satisfy customer demand while making RealGames a stronger competitor in the market.

“What excites me, and how we move the North American business forward and all our businesses forward, is how you tie all these assets together, because it’s not really in our belief system on this planet to be No. 2 forever,” said Matt Hulett, RealGames’ chief revenue officer. “There’s certain things that we do really well today across these different platforms that you’re going to start seeing in the next couple of months.”

He said that will include some strategic “magic beans” that RealGames isn’t yet ready to reveal.

RealGames is one of the largest developers and distributors of casual games -- simple, addictive titles meant to appeal to broad audiences. It makes money from game subscriptions, advertising and the sale of downloadable games, distributing titles licensed from others and developed in-house. It’s known for titles including “Collapse,” picked up through its 2004 acquisition of Seattle-based game firm GameHouse. RealNetworks’ game unit posted a $62.5 million loss in 2009 as the online ad market slumped and competitors, including Seattle-based Big Fish Games, dropped their prices, forcing RealGames to follow suit. Charges for goodwill and asset impairment also affected the result significantly.

As part of its new strategy, RealGames is pushing back against that trend by sticking to higher prices for premium games, such as a new title in the “Mortimer Beckett” series that debuted in January at $19.99, bucking the trend of sub-$10 games. In addition, RealGames executives wants to create a better “ecosystem” around their games, taking a more comprehensive approach to computers, the web, social networks and phones.

“The future is going to be about integrating those game plays,” said RealGames President John Barbour, the former Toysrus.com CEO, who was courted and hired by Glaser to lead the games division in 2008. “The consumer today is growing more and more demanding of multi-device play.”

Barbour cited as an example the ability to play a Facebook game on a computer and then later, while sitting at the airport, use a mobile device to play “a sympathetic game -- not exactly the same game, but a game that’s aligned.”

The unit is tapping two social networking veterans to help move toward that goal.

RealGames says it has hired as its vice president of social games Jeffrey Revoy, who was responsible for the Yahoo! Answers community site as the Sunnyvale, Calif., company’s vice president of search, local and social media. RealGames is also promoting its vice president of engineering, former MySpace executive Wilf Russell, to the position of chief technology officer.

They join RealGames chief revenue officer Hulett, the former CEO of Seattle-based online advertising startup Mpire, who returned to RealNetworks last year with responsibility for RealGames’ North American business.

Many of RealGames’ biggest competitors are close by, as fellow members of the Seattle region’s thriving community of casual game developers and distributors. Among them: Big Fish Games, WildTangent, Amazon.com and Microsoft’s MSN Games. A February 2010 study by the comScore Networks research firm ranked RealGames 12th among online gaming sites in the U.S., with more than 5.3 million unique visitors for the month in the country.

RealGames already has taken one significant step toward unifying its various offerings, last year merging its RealArcade online game distribution portal in the U.S. into its GameHouse portal.

Also last year, RealGames launched an initiative called the “Federation of Studios,” in which it works with independent developers to port and distribute their games across a variety of mobile phones. For example, the company is working with Lima Sky, developer of “Doodle Jump,” to bring the hit iPhone game to a wider variety of handsets and operating systems.

The company has established a foothold on Facebook already, with games including “Uno” and “Collapse” on the popular social network. About 40 of RealGames’ more than 400 employees are working on that part of the business, Barbour said.

RealGames has a “fairly interesting collection of assets,” said Andy Hargreaves, senior research analyst with Pacific Crest Securities in Portland, Ore. However, he said, it will be key for the unit to grow revenue and move toward profitability to improve its strategic position.

The idea of turning RealGames into an independent operation isn’t new. RealNetworks first announced plans to spin off the RealGames unit as an independent company, through an IPO, in May 2008. But the company tabled the plan when the market turned down. In February, following the departure of founder Glaser as chief executive, interim RealNetworks CEO Bob Kimball announced plans to “separate” from the broader company both RealGames and Rhapsody, RealNetworks’ music joint venture with MTV Networks.

In the case of Rhapsody, that separation will come through creating a new, standalone company. In contrast, the initial separation of RealGames will instead make it an independent operation inside RealNetworks -- with its own payroll, administrative and customer service functions, for example.

Barbour said RealGames is likely to remain part of RealNetworks in that way at least for this year, unless something unexpected happens. The idea is to position the unit to be completely separated when market and business conditions improve, through an IPO, acquisition or some other type of deal.

“It’s a great business but it’s not at the scale that makes a really hot IPO at the moment,” Barbour said. “Why rush it?”

RealNetworks explained in a March 10 regulatory filing, “We have not yet determined the structure of the separated business, including whether we will retain control of the separated Games business or enter into another strategic transaction involving the business.”

During an interview this week, Barbour and the other executives hinted at more changes in the works, but declined to go into detail. Barbour, 50, a native of Scotland who still speaks with a heavy accent, smiled when asked whether RealGames plans to change its name as part of the overhaul.

“It’s a really good question. Don’t know. Well, we do know,” he said. “That could be one of our announcements coming up sometime.”