Segment Reporting (Policies)

3 Months Ended

Mar. 31, 2022


Note 11.			Segment Information

We manage our business and report revenue and operating income (loss) in three segments: (1) Consumer Media, which includes licensing of our codec technology and our PC-based RealPlayer products, including RealPlayer Plus and related products; (2) Mobile Services, which includes our SaaS services, our integrated RealTimes® platform which is sold to mobile carriers and our computer vision platform, SAFR (Secure Accurate Facial Recognition); and (3) Games, which includes all our games-related businesses, including sales of in-game virtual goods, mobile games and games licenses, games subscription services, and in-game advertising and advertising on game sites.

RealNetworks allocates to its Consumer Media, Mobile Services and Games reportable segments certain corporate expenses, which are directly attributable to supporting these businesses, including but not limited to a portion of finance, legal, human resources and headquarters facilities. Remaining expenses, which are not directly attributable to supporting these

businesses, are reported as corporate items. These corporate items may also include changes in the fair value of the contingent consideration liability, restructuring charges, and stock compensation charges.

RealNetworks reports the three reportable segments based on factors such as how we manage our operations and how the Chief Operating Decision Maker (CODM) reviews results. The CODM reviews financial information presented on both a consolidated basis and on a business segment basis. The accounting policies used to derive segment results are the same as those described in Note 1. Description of Business and Summary of Significant Accounting Policies, in the 2021 10-K.

Segment results for the quarters ended March 31, 2022 and 2021 (in thousands):


Consumer Media	Quarter Ended March 31,

	2022		2021
Revenue	$	2,111	$	3,309
Cost of revenue	388		478
Gross profit	1,723		2,831
Operating expenses	1,472		2,201
Operating income	$	251	$	630


Mobile Services	Quarter Ended March 31,

	2022		2021
Revenue	$	5,640	$	5,980
Cost of revenue	1,045		1,492
Gross profit	4,595		4,488
Operating expenses	6,666		6,145
Operating loss	$	(2,071)	$	(1,657)


Games	Quarter Ended March 31,

	2022		2021
Revenue	$	5,525	$	6,599
Cost of revenue	1,295		1,705
Gross profit	4,230		4,894
Operating expenses	3,999		5,098
Operating income (loss)	$	231	$	(204)


Corporate	Quarter Ended March 31,
	2022		2021
Cost of revenue	$	8	$	4
Operating expenses	3,360		4,960
Operating loss	$	(3,368)	$	(4,964)

Our customers consist primarily of consumers and corporations located in the U.S., Europe, and various foreign countries (Rest of the World). Revenue by geographic region (in thousands):


	Quarter Ended March 31,
	2022		2021
United States	$	8,187	$	9,932
Europe	2,107		2,230
Rest of the World	2,982		3,726
Total net revenue	$	13,276	$	15,888

Long-lived assets (consisting of equipment, software, leasehold improvements, operating lease assets, and goodwill) by geographic region (in thousands) are as follows:


	March 31, 2022		December 31, 2021
United States	$	14,098	$	14,402
Europe	7,057		6,682
Rest of the World	1,228		1,354
Total long-lived assets	$	22,383	$	22,438