Rafat is reporting over on our sister site PaidContent.org that RealNetworks (NSDQ: RNWK) says it will spin-off its global casual games business into an independent company by the end of the year. The company is looking at two scenarios: distributing shares of the new company to shareholders, or complete an IPO and sell up to 20 percent of the new company’s shares. Rafat’s writes: “RealNetworks is finally doing the rationalization of its business lines.”

Real’s rationale for the spin-off: It results in two “more flexible and focused companies. In addition, the separation will provide the games business with an industry-specific currency for future acquisitions and enhance its ability to attract and retain the best talent in the industry.” Also, it will result in lower complexity in understanding and tracking RealNetworks’ performance, the company said.

Game revenues: In Q108, RealNetworks’ games business revenue rose 33 percent to $31.8 million compared to last year. For 2007, game revenue was $108.5 million, up 26 percent over 2006.

What’s left: If it gets rid of games and since it has already signed an JV with MTV for its music business, you might ask what’s left? The other two divisions are Media Software and Services and technology products and services. Technology products and services is the company’s largest group in terms of revenues by far, and comprises of its mobile infrastructure business, which it acquired through WiderThan. Revenues for this business increased 15 percent in Q1 to $51.3 million, compared to a year ago.

Mobile games: It would be interesting to know how much of Real’s game business is from mobile. Many insiders recently have called the mobile game business model broken because too few revenues are being split between too many companies. Because of this, several companies are trying to create scale through mergers and acquisitions. Looks like this could also be a plan for Real—the difference being it may have the resources and currency to conduct a roll-up.

More on here. and on earnings here. Release.