The second business is Online Gaming and Services, currently contributing about 25% of sales. There are two subsidiaries that comprise this unit. FunTown is a Taiwan-focused operation that offers a wide variety of games, from casual ones like Mahjong and online versions of popular Asian table games, to licensed "massively multiplayer online role-playing games" (MMORPGs) such as Warhammer Online (licensed from Electronic Arts - EA) and Phantasy Star (licensed from Sega). FunTown has nearly 12 million registered users. The other online gaming subsidiary is T2CN, a huge (over 70 million users), China-based business whose focus is on sports games.

Gigamedia historically also ran a number of Internet service providers, but divested the last of them in September 2008. Today all of its business is focused on online gaming, a growth industry with very attractive margins and relatively low capital requirements. This is reflected in some impressive financial numbers. Gigamedia runs operating margins in the low 20% range, and free cash flow margins come in at about the same levels. Returns on invested capital are strong, averaging over 20% on a standard ROIC basis, and close to 60% using a Magic Formula calculation. The balance sheet also is solid, with $97 million in cash and about $14 million in short term borrowings.

The company has delivered some impressive growth recently, with sales averaging 38% annual growth and operating profits 67% since 2004. There is still plenty of opportunities for future expansion.