Today it is launching Hidden Chronicles, the company’s first-ever “hidden objects” game on Facebook.

So far, the casual game genre, which challenges players to find wineglasses or candlesticks in a crowded and messy illustration, has not had a major presence on Facebook.

That is, with one exception: Facebook deemed Gardens of Time by Disney’s Playdom division the most popular game of 2011.

In many regards, Zynga’s Hidden Chronicles is a copycat of the game or others found on the PC. The launch is important to Zynga since it marks one of the first times it is branching out from creating ’Ville games. Such hits as FarmVille and CityVille laid the foundation for Zynga’s $1 billion public offering in December.

Cara Ely, creative director of Hidden Chronicles, said the category is popular on the computer, but today the games are single-player experiences.

“Zynga has so much knowledge about social play,” she said. “People who already like hidden object games will have this new twist, and then people who have been playing ’Villes will enjoy them if you are a puzzle solver and like that completion-ist feeling.”

The premise of the game is that your Uncle Geoffrey has died under suspicious circumstances, and he’s left behind a number of clues to solve the mystery.

After arriving on the estate, the game feels like a scavenger hunt, where you search the uncle’s home and its grounds, including tree houses or secret gardens that you gain access to over time.

And, because it is a social game, you will need friends for some components of the game.

Challenge your friends to a contest of who can find the most hidden objects in a particular scene within 60 seconds, or earn “reputation points” by interacting with friends to unlock new content and scenes. If you don’t want to interact with friends, you can always pay to unlock these new scenes.

After all, Zynga’s got to have a way to make money.

Ely said the game will be able to live on forever with no final conclusion as to why your uncle died.

“We have a lot of story written that goes beyond that. We’ve structured it so you solve one piece, and then you have another avenue to go down,” she said. “It’s like a TV series that goes on as long as you have new narrative and story content.”

Ely, who joined Zynga last year, was the creator of the popular Dream Day Wedding series of hidden object games on the PC and worked at Sierra Online and iPlay.

Hidden Chronicles, which is expected to go live on Facebook later this morning, will be available in 15 languages.

The latest title in the adventure series will be called Escape From Ravenhearst, and even though its arrival is highly anticipated, the company doesn’t consider it to be one of its big hits.

That’s because Big Fish doesn’t really have one clear hit.

Mystery Case Files has been played by 100 million people on the PC over the past two years, but the game series can’t really be considered a hit, because it did not generate more than 2 percent of the company’s overall revenue.

In fact, not one of the company’s other approximately 300-plus titles released each year made up a greater percentage, according to a spokesperson.

For comparison’s sake, look at pop-culture phenomenon Angry Birds, which has been downloaded 500 million times. And then there’s Zynga, the top game maker on Facebook. It reported that at one point last year, three of its titles — Mafia Wars, FarmVille and Zynga Poker — comprised 32 percent, 29 percent and 20 percent of its online game revenue, respectively.

If you want to play Ravenhearst, expect to pay for it and then download it to your PC.

Mystery Case Files, which uses dark graphics and rich storytelling, will cost $14 to those who subscribe to the Big Fish game portal, and $20 for non-subscribers. (Note: Not all of the 100 million players paid for the games, since there’s the option to try before you buy.)

Here’s the company’s trailer for the game:

According to multiple sources, 75 percent of the company’s 500-plus employees received the bonus. The dividend was based on tenure, with some of the longer-term employees receiving as much as $100,000.

Big Fish CEO Jeremy Lewis declined to comment, but confirmed that the dividend was given to shareholders and vested option holders.

The dividend shows that the privately held game maker is flush with cash, and that it may have big plans to come.

Big Fish has been considered an IPO candidate in recent years; the latest rumors hint it could come as soon as next year.

Since being founded 10 years ago, the company has grown quickly. It has hired 50 employees worldwide over the past few months, including new CFO David Stephenson. Prior to the job, Stephenson was VP of finance at Amazon.com.

The company specializes in producing games for the casual games market, including puzzles, hidden objects and other strategy games, but has steered clear of the recently popular free-to-play model adopted by newer games companies, like Zynga.

Instead, many of its games are sold through a monthly subscription online or for download on the iPhone and iPad.

But this story is about GameHouse, the Seattle company’s $100 million casual games business.

The facts aren’t pretty.

Revenues are down and there are 100 fewer employees than there were a year ago. Twice, RealNetworks has said it was going to spin off the division, only to cancel plans later.

But from the fourth floor of Real’s headquarters, where stained frat-house couches and Friday happy hours rule, Matt Hulett, the SVP and president of GameHouse, spins a completely different picture.

He believes he is running the next social games powerhouse.

“I’m not happy until we are in the Top 10,” he said.

Hulett isn’t necessarily delusional. He’s happy being the “restart” or “turnaround” guy who gets his hands dirty.

Since Hulett got the job about a year ago, GameHouse has become one of the top 20 game makers on Facebook.

Unlike Zynga, it concentrates on casual titles, such as puzzle games, slot machines or what you might call “match-three” games, which fit into the Tetris-like genre. Currently, some of its best titles are UNO, Scrabble and Collapse! Blast.

But its monthly active users total only 4.6 million, and its daily active users don’t even surpass one million. For an unfair comparison, Zynga has 268 million monthly users and 48 million daily users.

Today, Hulett is unveiling its latest match-three game, Bayou Blast, slated for release on Facebook at the end of October. Users blast away gems by tracing a line over matching gems in one contiguous line. Bayou Blast, which represents a culmination of the company’s social efforts to date, will be followed by Let’s Make a Deal and new slot games in the beginning of the year.

When he took the job, Hulett made some drastic decisions.

He saw the company’s traditional online download and subscription casual games business in decline. Logically speaking, fewer people are willing to pay $20 a month for a subscription when there are games on Facebook for free.

But Hulett figures if other casual game makers — like Wooga, PopCap (acquired by Electronic Arts) and King.com — can climb their way up the charts, why can’t he?

Social now comprises up to half the company’s team, and this year Hulett plans to invest $10 million in the effort. He said he cut the headcount from 400 by more than half about a year ago, and has rehired social game developers and others with experience building infrastructure, such as analytics. Today, GameHouse is back up to almost 300 employees.

What’s more, Hulett says he can rely on a backlog of great intellectual property, which created games with very long lives on the Internet, for Facebook and eventually mobile. It can even remarket those new Facebook titles to its GameHouse member base of 20 million users.

If GameHouse does get into the Top 10, I asked Hulett if RealNetworks will announce that it’s ready to be spun off — again.

“We’ve announced that we were going to separate twice. I won’t be the one who says it for the third time,” he said. “I want our metrics to speak for themselves. If all that stuff happens, then a lot of things happen. It’s best to get inbound calls.”

At least one company that wants a bigger Seattle presence and is on pace to acquire a company every month could be the one on the other line: Zynga.

Both have been exceedingly good at getting big fast, raising tons of cash and at creating a brand new industry. I’ve written about that before.

But it appears the daily deals space and games industry could have even more in common than I thought. PopCap, which turned down a $1 billion buyout offer from Zynga for a $750 million offer from Electronic Arts, started selling one of its most popular games today for half-off on Tippr, which competes against Groupon and others.

So far, 26 people have purchased PopCap’s Plants vs. Zombies for $10, which represents a discount of 50 percent, so I’m pretty sure the deal isn’t a ploy by PopCap to juice its sales right before the deal with EA is finalized.

Over the past year, daily deals have quickly expanded from offering spa and restaurant discounts to just about every other category under the sun, including Amazon gift cards, movie tickets, travel deals, food, clothing, etc.

But a videogame download is still a rare find.

Together the pair makes sense for the right game. PopCap’s game titles are considered casual titles that appeal to the mainstream, much like games found on Facebook. Its PC titles, including Bejeweled, are frequently sold online or at major retailers, such as Wal-Mart. Daily deal providers, which have millions of subscribers, reach a similarly wide audience.

For example, it wouldn’t surprise me to see an offer for 50 percent off Facebook Credits in the not so distant future, or for specific games that are seeking new distribution.

Terms of the deal were not disclosed. PopCap said it will develop four or five new Facebook games by the end of the year. The acquisition will also enable the company, which is hoping to file for an IPO this year, to have a presence in San Francisco.

PopCap, which is mostly focused on PC gaming, is already attracting nearly five million daily users on Facebook with titles such as Bejeweled Blitz and Zuma. Zynga, the category leader, attracts more than 55 million daily users and has been on an acquisition tear, acquiring at least one company every month.

The company also recently tried to expand beyond casual games by launching an experimental label called 4th & Battery. The label is an effort to give the company’s designers and developers the ability to create edgier games that wouldn’t normally fit under the company’s casual games reputation.

ZipZapPlay says it is a profitable, venture-backed company that was founded in 2007 by Curt Bererton and Mathilde Pignol. Today, it has 17 employees, including the two founders, and is known for making the Facebook title Baking Life. In the game, you bake items, hire your friends to sell them and try to be the most successful baker in town.

The San Francisco studio will be headed by Bererton and Pignol, who will report to PopCap VP of Social Games Development Jon David.

The Seattle-based company is the king of casual, for producing hit titles such as Plants vs. Zombies, Zuma Blitz and its most-recognized title, Bejeweled, which four million people still play every day.

“We are ready to be public this year if we think it makes sense,” said PopCap’s CEO David Roberts.

For most of the company’s existence, it has made money primarily by charging users for a game that they either buy in a box off the shelf or download over the Internet. In 2010, PopCap’s revenues totaled $100 million.

But the revenue mix is slowly starting to change.

Always an equal-opportunity platform developer, PopCap has aggressively developed games for computers, video-game consoles and mobile phones, leaving no gem unturned.

Now it’s focused on Facebook, the ridiculously lucrative market that has spawned new game companies like Zynga, Electronic Arts’ Playfish and Disney’s Playdom.

Two years ago, PopCap started to see Facebook’s potential and launched Bejeweled for free. In May 2010, it started monetizing the game by selling virtual goods, like coins and power-ups. It took only two months for PopCap to hit $1 million in monthly revenues on Facebook.

Roberts declined to say how much it is making on virtual goods now, but points out that it is the sixth-largest developer on Facebook in terms of daily active users, after other game makers, like Zynga, Electronic Arts and others, according to AppData.

“Our biggest growth is Facebook, virtual goods and microtransactions,” he said. “We are halfway through our transition from license to Facebook.”

If it is not already obvious, Roberts says, the two dominant themes of the year will be social and mobile.

PopCap’s iPhone games have also done exceedingly well, scoring two of the top 10 best-selling apps of 2010. Bejeweled 2 and Plants vs. Zombies were ranked fourth and ninth, respectively.

Interestingly, of the games that made the list, each of them costs 99 cents, except for Plants vs. Zombies, which costs $2.99.

What makes gaming such a big opportunity?

The major trend developing from smartphones and social is that games can now be as popular as a movie and “not be a weird, niche-y thing,” he said. “The new platforms are what drove that change.”

The trend that Roberts is referring to was cemented late last year when Activision Blizzard reported that Call of Duty: Black Ops hit $1 billion in sales after slightly more than one month. In its first five days alone, it outpaced all records for five-day box office receipts of any movie.

Unlike Call of Duty, PopCap’s games are more inviting. It forgoes guns and missiles for brain teasers and puzzles that offer players a few minutes of relaxation.

That’s not a small niche. On average, roughly 50 million people are playing a PopCap title across its network every month.

Roberts said there’s an opportunity to communicate with that audience more, but it has some learning to do, about how and when to send messages on game tips or cross-promoting titles. “If we are going to be a broad-based consumer company, we have to learn to be that kind of company.”

PopCap has 400 employees, half of which are based in its downtown Seattle sky-rise offices and the other half at its studios around the world, including Shanghai and Dublin. It has the enviable position of being profitable and self-funded, other than taking a small mezzanine round of funding a couple of years ago.

The company, which has made a big push into Facebook games in the last six months, says it will use the new money to develop more games for the social network, as well as for Apple’s iPhone and Google’s Android platform.

The new money brings OMGPOP’s total funding to $16.6 million over its four-year history.

A game called Angry Birds is dominating the best-selling-applications charts for Apple’s iPhone with a simple, whimsical premise: Players turn different species of scowling birds into projectiles with which to crush a collection of grunting pigs scattered around various ramshackle structures. More than 12 million copies of Angry Birds have been sold since it went on sale late last year, most of them 99-cent downloads for iPhones and iPod touches, according to Rovio Mobile Ltd., the Finnish company that created the game.

Why do smart people love seemingly mindless games? Angry Birds is one of the latest to join the pantheon of “casual games” that have appealed to a mass audience with a blend of addictive game play, memorable design and deft marketing. The games are designed to be played in short bursts, sometimes called “entertainment snacking” by industry executives, and there is no stigma attached to adults pulling out their mobile phones and playing in most places. Games like Angry Birds incorporate cute, warm graphics, amusing sound effects and a reward system to make players feel good.

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The New York-based company is still closing the round, but I’m told existing investors Bessemer Venture Partners and Spark Capital will re-up, and that Softbank Capital NY will also come aboard. There’s at least one other significant investor likely to join, but I don’t have their name (feel free to tell me, though–I keep all correspondence anonymous: peter@allthingsd.com).

OMGPOP has raised $6.5 million during its four-year history, which saw it start out as a sorta-dating site. But for the past few years it has focused squarely on free-to-play casual games, and has recently been trying to generate revenue via a freemium model, as well as some forays into advertising.

And like many casual games start-ups, it is getting a big boost by integrating its games into Facebook. It integrated with the social network this summer, and CEO Dan Porter says that move has doubled the company’s user base from three million to six million. Porter declined to talk about funding news.

Interest in casual games has sparked a flurry of deals in the past year, including Electronic Arts’ purchase of Playfish, Disney’s purchase of Tapulous and DeNA’s purchase of Ngmoco. But the big player remains Zynga, which is both tightly integrated with Facebook and often described as an obvious IPO candidate.

Rob Glaser is stepping down as CEO of Real Networks, the company he founded in 1994. Sources say the move was instigated by his own board, but that he cooperated with the decision and was involved in the transition.

Glaser will be replaced by Robert Kimball, a well-liked executive who most recently served as general counsel and executive vice president of corporate development at RealNetworks (RNWK).

Glaser, who will remain chairman of the Seattle-based Internet company, owns 38.4 percent of Real’s shares, making him by far the largest investor.

His move follows other significant news at Real: Last week, a federal judge dismissed its claims against Hollywood studios in the RealDVD case.

A few days earlier, COO John Giamatteo said that he would step down; the company announced that news yesterday afternoon.

But it is Glaser’s departure that is most important, given that he has been an innovative, pioneering and high-profile Internet leader for so long. Nevertheless, he eventually had to answer for problems with performance.

In fact, Glaser and the board had been talking for some time about making these changes, although it came much more suddenly than Glaser preferred, according to several sources. He had wanted to do a search for a new CEO before he left and make the shift less abrupt.

But the board–with the message coming from director Jonathan Klein, co-founder and CEO of Getty Images–felt a quicker change was needed.

“It’s a typical case of a founder and Internet visionary who can’t convert it to the bottom line. There was a great deal of admiration and respect for Rob, which delayed the decision, but eventually you can’t ignore the results,” says a person familiar with the company. “This move was a long time postponed, because he always had another good idea. But you have a staff whose options are all underwater, and the conversion of gross into net profit was not happening.”

It’s unclear when Glaser’s board informed him of the decision, but sources say that after processing the news, Glaser cooperated with and helped in the transition. He represented the company in a series of meetings at last week’s Consumer Electronics Show without letting on that he was on his way out.

He did, however, post an untypically melancholy message on Twitter yesterday:

Some Real employees and investors have had grievances with the company’s founder for years. A long string of former Real employees, for example, describe Glaser as a cantankerous boss, and Real’s stock price has withered since 2006, when it nearly broke the $12 mark.

The stock is now trading below $4.

And while Real was a genuine pioneer in Web video software and an early player in Web music services–the company was originally called Progressive Networks after Glaser’s political bent–it has been idling for many years.

For a while, for example, it was investing time and money in Web-based “casual games” and had filed to spin off that unit in 2008. But those plans were iced by the recession.

Meanwhile, RealNetworks split its Rhapsody music service into a joint venture with Viacom (VIA) unit MTV, but that service has also stalled, and the two partners have been trying to renegotiate the terms of their partnership.

Real’s crowning achievement of the past few years: The whopping $761 million antitrust settlement it won in 2005 from Microsoft (MSFT), Glaser’s former employer.

Here’s Glaser’s memo to his staff, followed by a note from Robert Kimball, and, finally, the company’s press release.

From: Rob Glaser
Sent: Wednesday, January 13, 2010 1:35 PM
To: All RealNetworks Employees
Subject: Important Personal News

Team,

Today we’re announcing something that I’ve been thinking about for a long time. Nearly 16 years after founding RealNetworks in 1994, I’ve decided to step aside from day to day operations. Accordingly, we’re announcing today that I am relinquishing my CEO job and will focus on my role as Chairman of Real’s board.

A decision of this magnitude produces a complex bundle of feelings. First, profound gratitude for the amazing colleagues I’ve had the opportunity to work with during a chapter that has turned out to be a third of my life. I am incredibly proud of the creativity, persistence, and commitment to excellence that our teams around the world bring to the table every day.

Second, deep appreciation for the billions (yes, billions!) of consumers that use or have used our products, the hundreds of millions of consumers that use our products every year, and the tens of millions of consumers that use our products and services every month. I am also grateful for the trust placed in us by our fantastic carrier and other distribution partners. Very few companies get to have the global reach and impact that we do.

Third, great confidence in the team that will be running the company day-to-day. As we kick off a search for my permanent successor, Real will be led by Bob Kimball as Acting CEO. Bob is one of the most passionate, hard-charging, and lucid executives I’ve ever had an opportunity to work with, and given his decade of leadership at Real, I am confident that the company won’t skip a beat.

Fourth, the bittersweet feelings that come from closing the book on a 16 year labor of love, emphasis on both labor and love. I feel very fortunate that as Chairman I will still get to carry the torch for everything that has made and will continue to make our company great.  And with 2 small children and a third on the way, I feel very lucky that the rhythm of my life can now change, at least for a time, to allow our family to do some things that might not otherwise have been possible. I also look forward to spending more time on civic and other projects outside of Real.

While there’s never an ideal time to make a change like this, this is as good a time as any. We’ve weathered the brunt of the Great Recession and have done what we said we wanted to do, which was to keep our core solid while also building for the future. We’ve also undertaken an extremely rigorous strategy review and have a very exciting road map for the future that you’ll hear about in the days and weeks ahead. And the start of a new decade is a good time, poetically, to pass the baton.

Thanks again for everything, and I hope to see all of you soon.

Rob

From: Robert Kimball
Sent: Wednesday, January 13, 2010 1:07 PM
To: Real@real.com
Subject: Important News

Dear Team,

Rob Glaser, our founder, has resigned as CEO effective today. Rob is sending out a separate note discussing his decision. While Rob will no longer have an operating role, he will continue to serve as Chairman of the Board. We look forward to continuing to work with Rob and I want to thank him for making RealNetworks what it is today and leaving us with a strong foundation upon which to build.

The Board has asked me to assume Rob’s executive responsibilities and has appointed me President and acting CEO. The Board of Directors will consider candidates for the permanent CEO role in the coming months. The senior executive team is galvanized and committed to making RealNetworks a company where customers love our products, employees are excited about being here, and we create value for our shareholders. We want RealNetworks to be a more focused, faster growing and profitable company. We are going to simplify the way we do business, empower employees to do their jobs, and hold people accountable for their results. I look forward to working with all of you to transform RealNetworks as part of this next chapter.

As part of transforming RealNetworks, I am personally committed to providing you with candid, clear and frequent communication so you know where we stand and where we want to go. In the coming weeks, we will be sharing with you changes in the way we operate and organize our business. And we want you to talk to us. Tell us when we are succeeding and when we are failing to make the changes necessary to transform. We plan to hit the ground running and we will need your help and input to succeed.

As you learned yesterday, John Giamatteo announced that he will be leaving in April to pursue another opportunity. John has built a great team here are Real and is completely supportive of the executive team going forward and will be working closely with all of us to ensure a smooth transition. Finally, I want to thank all of you for your contributions to RealNetworks. Our employees are our greatest asset and I humbly ask for your support and commitment to build our company into the great company we all know it can be.

Best to all,

Bob

REALNETWORKS’ FOUNDER ROB GLASER STEPS DOWN AS CEO

Company appoints Robert Kimball President and Acting CEO

SEATTLE–January 13, 2010 Digital entertainment services company RealNetworks, Inc., (Nasdaq: RNWK) announced today that founder Rob Glaser has stepped down as CEO. He will remain chairman of the board of directors of RealNetworks. The company also announced that its board of directors has appointed Robert Kimball president and acting chief executive officer. The board also appointed Mr. Kimball to the board of directors.

“After nearly 16 years, I’ve decided it’s time for me to step away from day-to-day operations,” said Glaser. “I’m grateful to all of our stakeholders–customers, partners, shareholders, and most of all, employees–for the support and commitment they’ve given to RealNetworks. I remain committed to the company and look forward to continuing to serve in my capacity as board chairman.”

In February 1994, Mr. Glaser founded what was then known as Progressive Networks, a pioneer in the field of digital audio and video technology for the Internet. Under his leadership, Real has grown into a multinational company, providing digital entertainment products and services to hundreds of millions of consumers around the world.

“Few people have changed an industry and created a unique experience for billions of people,” said Jonathan Klein, a board member of RealNetworks and the co-founder and CEO of Getty Images. “Rob has changed the face of digital entertainment with RealNetworks’ streaming media products. At the same time Rob has had a profound impact on politics and philanthropy. I’m sure he will continue to do this extraordinary work as well as spending time with his wife and young children. We are grateful for all he has done for the company, the industry and employees, and are pleased that he will continue to serve on the board.”

Bob Kimball joined the company in 1999 and has been a member of the senior executive team since 2003. He most recently served as general counsel and executive vice president of corporate development at Real. “In the decade he’s been at Real, Bob has proven to be an outstanding business executive and leader, and under his leadership the company won’t skip a beat,” said Mr. Glaser. “Our board has great confidence in Bob, and he will be a candidate for the permanent CEO position as part of a formal search process that will begin soon.”

“I look forward to the opportunity ahead,” said Mr. Kimball. “Real has a great team in place, a strong financial position, close customer relationships and fantastic products. We plan to transform Real into a more focused and more profitable company that delivers value to our shareholders.”

[Peter Kafka contributed to this report.]

Market research firm NPD Group said overall revenue from videogame hardware and software fell 7.6 percent in November to $2.7 billion compared with the same month in 2008. Game software sales fell 3 percent to $1.41 billion.

Monthly sales for the industry have been down since March, except for a slight uptick in September. Results would have been even weaker in November were it not for Activision Blizzard Inc.’s (ATVI) “Call of Duty: Modern Warfare 2” shooter game, which had the best first-month sales ever, selling more than all of the other games in NPD’s top ten list combined.

The last three months of the year are traditionally the most important period for the industry, but analysts said sales of mass-market games and casual games for families were particularly weak.

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