Segment Reporting (Policies)

3 Months Ended

Mar. 31, 2021


Note 12.			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 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 2020 10-K.

Segment results for the quarters ended March 31, 2021 and 2020 (in thousands):


Consumer Media	Quarter Ended March 31,

	2021		2020
Revenue	$	3,309	$	3,495
Cost of revenue	478		611
Gross profit	2,831		2,884
Operating expenses	2,201		2,458
Operating income	$	630	$	426


Mobile Services	Quarter Ended March 31,

	2021		2020
Revenue	$	5,980	$	6,690
Cost of revenue	1,492		1,696
Gross profit	4,488		4,994
Operating expenses	6,145		7,588
Operating loss	$	(1,657)	$	(2,594)


Games	Quarter Ended March 31,

	2021		2020
Revenue	$	6,599	$	6,637
Cost of revenue	1,705		1,794
Gross profit	4,894		4,843
Operating expenses	5,098		4,923
Operating loss	$	(204)	$	(80)


Corporate	Quarter Ended March 31,
	2021		2020
Cost of revenue	$	4	$	3
Operating expenses	4,960		2,584
Operating loss	$	(4,964)	$	(2,587)

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,
	2021		2020
United States	$	9,932	$	10,214
Europe	2,230		2,252
Rest of the World	3,726		4,356
Total net revenue	$	15,888	$	16,822

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


	March 31, 2021		December 31, 2020
United States	$	15,426	$	18,318
Europe	7,159		7,638
Rest of the World	1,054		1,227
Total long-lived assets	$	23,639	$	27,183