A stalwart in the rough-and-tumble world of online poker, GigaMedia ( GIGM - Get Report)announced today that its revenues fell in the first quarter, a result of the sputtering economy and exchange rates.

But the news that will likely get investors talking was the company's quick statement confirming that it's in "final round discussions with two parties" for a strategic partnership or sale. The online gaming and poker concern didn't give any more details.

In the release, GigaMedia reported first quarter revenue of $44.4 million, down 13% from $51.2 million in the year-ago period. It's only slightly off the $44.6 million from the fourth quarter. With earnings of $4.8 million, earnings per share came to 8 cents. Last year at this time, the company produced EPS of 20 cents. After excluding certain items, EPS came to 10 cents.

Income from continuing operations also dropped to $5.2 million from $12.7 million in the year-over period.

The company blamed the global economic recession and a currency drop in the euro against the dollar as the primary culprits. Seasonality also played a role, with GigaMedia saying that revenues typically peak in the fourth quarter. (Who knew there was a poker season?)

Analysts expected EPS of 9 cents a share on $43.9 million in revenue.

"In the first quarter, our Everest software business faced greater than expected challenges from the macroeconomic downturn and the weakness of the euro -- slowing our business in Europe," CEO Arthur Wang said in the release. "We have responded with a set of cost reductions and efficiencies which will protect the financial strength of the business, as well as prepare for a return to growth as a leaner, tighter organization."

Though there was a 17% year over drop in gaming software sales, the company delivered a small bright spot in its Asian online games business. Powered by a jump in sales from T2CN and FunTown during the quarter, the company saw its revenues grow 33% from the previous quarter, jumping to $12.7 million from $9.5 million.

And despite the fact that revenues for the segment were down 2% in the year-over comparison, the company continues to remain bullish, saying it expects the Asian online games segment to drive record numbers for the year. It also expects major new game titles to launch in China and Taiwan this summer.

"The good news: we believe we have hit bottom in this cyclical downturn and that the second half will see renewed strength in Europe," Wang added. "And in Asia, we are looking at our best year ever, with strong top and bottom-line growth."

Investors weren't terribly impressed after the announcement. Shares were down more than 5.8% in early morning trading. Perhaps they're holding out for that deal.

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