RealNetworks (NSDQ: RNWK) is playing two this afternoon—announcing Q1 earnings and the spinoff of its casual games business. Revenue rose 14 percent to $147.6 million, compared with $129.5 million in the same quarter last year. Earnings dropped to $2.4 million, or $0.2 per share, down considerably from Q107’s $40 million, or $0.22 per share—but, as I was just reminded, beat the consensus by five cents. Q107 was the last quarter of Microsoft’s (NSDQ: MSFT) direct contribution to Real’s bottom line through its antitrust settlement. (It’s also a vivid reminder of the law of large gains—next year’s comps can be painful.) Some revenue details:

-- Gaming, which is being spun off, rose 33 percent, to $31.8 million
-- Music was up 12 percent, to $38.1 million
-- Technology Products and Solutions, up 15 percent to $51.3 million (in part from 2007 acquisitions SonyNetServices and Exomi)
-- Media Software and Services took a hit, down 2 percent to $26.4 million

Earnings release | Webcast (5 p.m. ET)

Earnings call: A lot of attention on the proposed gaming spin as analysts try to wrap around the idea. Glaser explained that this is a unique case since the casual games business was set up and operated autonomously from the beginning. “Overall, we feel very comfortable with this decision” and that it “was deliberated over pretty carefully.” He also reminded them that 80 percent of the company’s business is unchanged.

Music: Speaking of the unchanged part, the gaming talk didn’t drown out questions about Real’s music business. Glaser listed three initiatives that are moving slower than planned, in part, because they turned out to be even more interrelated than originally planned. The three: streaming free music on the web, DRM-free sales, and the Verizon (NYSE: VZ) deal to deliver mobile music for Rhapsody America.

Update: Meanwhile, Burst.com announced the settlement of its patent dispute with Real: “RealNetworks agreed to pay Burst a one-time payment of $533,500 cash, in exchange for a license to a subset of the Burst patents. The nonexclusive license doesn’t include pass-through rights.