SEATTLE - RealNetworks Inc. said Thursday that it plans to spin off its casual games business into a separate company and distribute its shares to RealNetworks stockholders.

Shares of RealNetworks, which also operates the Rhapsody online music service and provides the RealPlayer media player, rose 62 cents, or 9.6 percent, to $7.10 in after-hours trading. The stock earlier finished regular trading up 10 cents at $6.48.

RealNetworks said that before spinning off the business it may hold an initial public offering and sale of as much as 20 percent of the company's stock.

In a phone interview, Chief Executive Rob Glaser said RealNetworks came to feel that spinning off the unit as a pure-play public company gave it the best opportunity in the long term to be a leader in the casual gaming space.

Also, the unit "always was a little bit more independent" than the rest of the company, he said.

RealNetworks expects that either a spinoff or an IPO followed by a spinoff will be tax-free to shareholders. The company plans to file the necessary paperwork with the Securities and Exchange Commission by the end of the year.

Glaser said plans to spin off the unit are not indicative of any future plans to spin off other parts of RealNetworks.

"This is a unique situation and I wouldn't expect to see another one like this any time soon," he said.