Viacom To Sell 'Rock Band' Manufacturer Harmonix

'The console games business requires expertise we don't have,' says CEO

November 12, 2010 2:08 PM ET

Viacom announced on Thursday that it was selling Harmonix, the Cambridge, Mass.-based company that currently develops and manufactures the Rock Band series of music games and was the original developer of Guitar Hero.

"Our decision to exit this business strategy is to focus on what we do best, and that's creating world class entertainment," Phillip Dauman, Viacom's president and CEO, said during an investor conference call on Thursday. "The console games business requires expertise we don't have. For us, this is all about focus."

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Viacom purchased Harmonix for $175 million in cash in 2006, and the inaugural entrant in the Rock Band series came out in 2007 to much fanfare and cross-promotion on the company's cable outlets like MTV and Vh1.

But the console-based music game series has taken a hit in recent years, with category sales for games like Rock Band and its chief competitor Guitar Hero declining by 49 percent in 2009 and going down even more sharply this year. The Boston Globe reported that one investment firm said the music-game market might not exceed $500 million in 2010, after raking in $1.7 billion in 2008.

There are a few probable reasons behind the category's decline. One is simply that the games have fallen out of favor. Another is the fact that keeping up with new entries in the series can prove costly; Rock Band 3, which was released in October, lists at $59.99 for the disc alone, and the newly designed instruments, including a Fender Mustang replica and a keyboard, can add up to $149.99 per controller per game.

Next-Gen Rock Games: Real Instruments, Motion-Sensing

Despite the overall bleakness in the music game category in 2009, last year's much-ballyhooed release of The Beatles: Rock Band, which had rich re-imaginings of the Fab Four's songs and instruments that replicated the group's, performed moderately well. It sold 1.1 million copies in the U.S. by the end of 2009 and according to an interview with Harmonix founder Alex Rigopulos "well over a couple of million units" to date.

Earlier this month, Harmonix released Dance Central, a dance game that uses Microsoft's camera-controlled motion-sensor peripheral to judge players' moves.

A game they couldn't win [Boston Globe]
Viacom's Dauman: Harmonix Sale Is About Focus; Digital Dollars, Not Dimes [paidContent]

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