RealNetworks and Zylom join forces to create Europe's leading casual games company

Real and Zylom together deliver the most comprehensive localised casual games content and customer services for European marketplace

SEATTLE, Washington and EINDHOVEN, Netherlands, February 7, 2006 – RealNetworks, Inc. (Nasdaq: RNWK), today announced it has acquired Zylom^® Media Group BV, a premier distributor, developer and publisher of high-quality PC-based casual games throughout Europe, in a transaction valued at up to $21 million or €17.2 million. Real is the leading provider in the U.S. of downloadable PC casual games, and with this acquisition Real now becomes the leading provider of downloadable PC casual games in Europe.

"We're delighted to bring Zylom into the RealNetworks family," said Rob Glaser, Founder and CEO of RealNetworks, Inc. "Games is very serious business at Real. By combining Zylom's broad-based European distribution and strong titles with our RealArcade, GameHouse, and Mr.Goodliving properties, we will be able to deliver more fun to more consumers around the world than ever before."

"By teaming up with Real, we will be the strongest casual games company in Europe," said Rutger Peters, CEO of Zylom. "Our combined strengths will allow us to deliver the very best games and services to our portal and ISP partners throughout the European market."

"RealNetworks has achieved the leading position in downloadable PC casual games by delivering games that consumers love," said Michael Schutzler, Senior Vice President of Worldwide Games at RealNetworks, Inc. "Zylom has an outstanding track record of delivering high value to consumers and partners, and we are delighted to join forces."

"This combination of companies will create the largest source of high-quality games localized for the European market," said Erik Goossens, COO of Zylom. "We are committed to aggressively expand our local content and customer support for all of Europe."

Based in Eindhoven, the Netherlands and founded in 2001, Zylom has been delivering exceptional casual games throughout Europe and was recently recognized as The Best Fun and Games website in the United Kingdom, Germany, and the Netherlands by www.websiteoftheyear.co.uk. The company's library includes 70 fully localised games in 7 languages including the popular Mirror Magic and Hotel Solitaire as well as hit titles from leading game developers including PopCap's Bejeweled and Iwin's JewelQuest. Zylom currently distributes these games through its own direct-to-consumer web site www.zylom.com and through premier European distributors that include AOL, Wanadoo, and Yahoo.

In 2005, Zylom generated approximately €6.65 million or $7.98 million in revenue and approximately €620,000 or $750,000 in net income. We expect Zylom to be slightly accretive to 2006 earnings with contributions to earnings increasing in future years.

Zylom co-founders Rutger Peters and Erik Goossens, as well as the rest of the Zylom team will stay in Eindhoven to lead Real's PC casual games business in Europe.

To experience Real's games services directly, visit www.realarcade.com, www.gamehouse.com, www.mrgoodliving.com - and now www.zylom.com.