Have "Guitar Hero" and "Rock Band" Peaked?

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Despite the fact that rock video games are still flying off shelves this holiday season, analysts have begun to wonder whether the market for both Guitar Hero and Rock Band has reached its peak. In November, sales from Guitar Hero games were down 19 percent from the previous November, while Rock Band experienced a 65 percent increase thanks to supply constraints that stifled its sales last year.

Insiders believe part of the problem is that the franchises' seemingly never-ending assembly line of new games is starting to exhaust consumers: World Tour is the sixth title in the Guitar Hero franchise since 2005 and a Metallica-inspired game is due out next year. Plus, the high cost of the full band kit for both GH and RB might turn off some consumers who are concerned about the recession. "I think the entire genre is definitely reaching its peak. With Guitar Hero, there's been so many releases. Every couple of months there's something new on this thing, and after a point consumers start to wonder what's going on here," said video game market analyst Jesse Divnich.

However, the new study completely omits the little detail that the creators of Rock Band have teamed with the most popular band in music history, the Beatles, to give the Fab Four their own game, which will more than likely be a worldwide smash given the catalog of songs. And there's a endless list of all-star artists — Led Zeppelin, Jimi Hendrix, the Rolling Stones — from which Guitar Hero can potentially create games for. Plus, purchasing songs for the games has gained iTunes-like popularity, and both franchises are just now flourishing overseas. And don't forget that DJ Hero on the horizon. "If this turns out to be a sustainable demand level, it's still very profitable," analyst Doug Creutz of Cowen & Co. said.

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