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Rock Band franchise unprofitable in Q3

Despite "strong" start of Beatles, Viacom CEO says MTV Games and Harmonix's rhythm game series negatively impacted margins during July-Sept. period.

Reporting on its third-quarter earnings yesterday, Viacom called out MTV Games and Harmonix's Rock Band franchise as a key revenue driver during the July-September period. As noted yesterday, The Beatles: Rock Band enjoyed a "strong" start and helped offset shrinking revenue from other segments of Viacom's Media Networks division, to which the BET, Comedy Central, and Nickelodeon channels, as well as other properties, belong.

"Now give me money (that's what I want)"

However, despite bolstering sales, the Rock Band franchise continued to weigh on the media conglomerate's bottom line. Speaking to investors and analysts following the earnings report, Viacom president and CEO Philippe Dauman said that the Rock Band franchise did not turn a profit during the period.

"In terms of Rock Band, Rock Band was a negative contributor to margins in the third quarter," he said. "We expect it to break even or be slightly profitable in the fourth quarter from a margin point of view.''

Dauman went on to say that Viacom will heavily push The Beatles: Rock Band during the holiday season, a period that he said will determine whether the product was a success.

"It really depends on how many units we sell in the holiday season," he continued. "That is what we are building the business for. The economy has made it tough, but we are out there, and we think we are being very competitive in the space, and it really depends literally on the next three to six weeks."

Interestingly, the Viacom executive also noted that the Media Networks division stands to gain in the event of a strong showing from Activision's Guitar Hero franchise, the first several installments of which were developed by Harmonix. "We also generate royalty fees through the Harmonix relationship with Activision," he said. "So to some extent, the performance of that business will depend on the performance of our competitor."

MTV Games did not return a request for comment as of press time.

124 Comments

  • joeisnub

    Posted Nov 8, 2009 1:27 am GMT

    I guess the music game era is starting to fade away....

  • GDCalibur

    Posted Nov 6, 2009 4:20 pm GMT

    This genre can only go so far before people will get tired of it. Its a bit hard to make this game unique with each add on or GH1.2.3. etc... So no real surprise. Oh well it had it's day in the sun.

  • Dan21278

    Posted Nov 6, 2009 2:07 pm GMT

    I Think everyone is really tired of these "Music Games". Rock Band Pearl Jam , Vocal Hero, Band Hero, DJ Hero, and i heard that they are making a Drum Hero. I seriously think this is too much.

  • madSomnambulist

    Posted Nov 5, 2009 5:31 pm GMT

    This isn't specific enough. How did it lose money? Did it take in less than it spent in controller production? Less from software than the franchising costs? Was the editor careless and meant to say that Viacom was unprofitable as a whole? We don't rate profit levels per game...

    Actually, it never even says "unprofitable", so the article name is somewhat misleading. Far more likely: Quote context wasn't given fully. RB franchise not with as high a profit margin? Ok, that makes sense. But given this was during a large software release and not a boring no-release development quarter, to think it could have lost money is almost mathematically impossible.Same end result, but that wouldn't make it read like the series was going to collapse in on itself.

  • wiiplay1

    Posted Nov 5, 2009 4:38 pm GMT

    @Crazyguy105

    No, I'm not saying it is bad. I'm just making sure you aren't saying it's bad!

  • Triton

    Posted Nov 5, 2009 3:52 pm GMT

    Baby you can drive my car...(in Forza3)

    I own both, only play Beatles when my wife wants to game. Case closed.

  • KingKronik

    Posted Nov 5, 2009 3:18 pm GMT

    whats this? people complaining about music games? so its finally c ome down to it... kids just dont like good music these days.

    everyones saying the beatles wernt the right choice... then what is the right choice? blink 182? AFI? My Chemical romance?

    kids are FN dumb. If you cant apprieciate the majestic that is the beatles, then you have NO taste in music.

    Beatles were the right choice, its just that the consumers would rather have a polly prissy pants game then learn about one of the greatest musical acts of all time.

    You people make me sick.

  • KittyHeart

    Posted Nov 5, 2009 3:04 pm GMT

    i agree the beatles werent exactly the best choice for a full stand alone rock band game... good for dlc though.

  • KittyHeart

    Posted Nov 5, 2009 3:04 pm GMT

    i agree the beatles werent exactly the best choice for a full stand alone rock band game... good for dlc though.

  • ebonyflame

    Posted Nov 5, 2009 2:43 pm GMT

    Just goes to show that The Beetles while undoubtedly a great band, probably not the best choice for stand alone Rock Band game. Simply put, it should have been DLC for the Rock Band franchise, as should all new music until a proper sequel can be fleshed out.

  • peteuplink

    Posted Nov 5, 2009 1:21 pm GMT

    Of course, if Harmonix/EA would lower the price a bit then maybe the games would sell better. It was £79.99 for one of the RB:Beatles guitars on it's own. For that price I'd expect to get the game and the guitar together. Then again the game only had about 40 songs on it (compared to 80 or so on other music games) and you have to pay to download the others.

  • Phazevariance

    Posted Nov 5, 2009 11:45 am GMT

    waaaaay too many 'music' games on the market, i'm not surprised this happened.

  • Elvis4576

    Posted Nov 5, 2009 11:11 am GMT

    gh is unprofitable because as you all know they over do thier games and make little or no money at all only hardcore fans buy thier endless amount of music games. As for rock band this would make rock band no3 (the beatles rb) so you really cant expect that much profit. At least rb is making one a year which is ironic that thier losing money for NOT making that many games

  • payne6705

    Posted Nov 5, 2009 10:22 am GMT

    well rockband 1 and 2 came out awhile ago and beetles just came out what did they expect?

  • THE-ZOZ

    Posted Nov 5, 2009 10:12 am GMT

    i heard there will be THE WHO : ROCK BAND ,i`d say to harmonix stop making these rock band spin-offs games and start developing a sequel to RB2

  • bbdowalt

    Posted Nov 5, 2009 10:11 am GMT

    I've never seen an article where everyone is more in agreement on the reason for the problem....too many music games. I want DJ Hero but the whole Band/Guitar Game thing is soooo tired.

  • randomname3

    Posted Nov 5, 2009 10:07 am GMT

    Good, maybe this is the first sign that the Rock Band and Guitar Hero craze is finally coming to an end. This was a fun an interesting concept in the beginning, but honestly, how many of these same exact games are they going to release? The Rock Band and Guitar Hero games are kind of like 80s slasher movies: the originals were really good and very successful, but then they just kept repackaging the products over and over again, so often that one was indistinguishable from the next. They didn't stop pumping out those stupid slasher films until the grosses went down, so maybe this is the first sign that the gaming audience is finally sick of these stupid games.

  • jmartin1016

    Posted Nov 5, 2009 9:55 am GMT

    The market is over saturated with these games. GH 1,2,3 sold so great due to them being a new genre of game, then rock band come along and 4 could play to gether, or try their hands at drums. Now there are 3 released a year. They should just release track packs, or alternate years they are released. That might bring the demand a little higher.

  • Rottenwood

    Posted Nov 5, 2009 9:11 am GMT

    Only one thing can save this franchise: having female vocalists (say, Fiona Apple or Lily Allen) as unlockables so you can have them do Limp Bizkit and Geto Boys songs.

  • Darth_Cola

    Posted Nov 5, 2009 8:58 am GMT

    I like how these knobs think that we gamers wont buy cuz of the economy, sure sum of us dont have money to blow 200$ ona game we all got sick of 3 yrs ago, maybe its cuz were jsut SICK of this over saturated market of Music games, god. these idiots dont have a clue, give it up man.

  • erikvduyn

    Posted Nov 5, 2009 8:53 am GMT

    @Waldkrieger:
    Then I suggest you go and grab a gun and join the army instead of playing all those stupid pretend shooters.
    If people like these games, then let them be.

  • Inconnux

    Posted Nov 5, 2009 8:43 am GMT

    I can't say that I am sorry that RB is not profitable...

  • Valacan

    Posted Nov 5, 2009 8:09 am GMT

    What the . . .? First Gamespot said that Guitar Hero out sold Beatles Rock Band. Then they said that Beatles Rock band out sold Guitar Hero. Then they said that it was a huge success. Then they say it's unprofitable? Make up your mind!

  • Bortson

    Posted Nov 5, 2009 6:57 am GMT

    Probably hurt their bottom line with manufacturing and shipping costs of all that extra hardware. I, and probably a few others, have way too many plastic guitars and drums already and really didnt need to compound the issue.
    Ill probably get the game for christmas and knowing that this will be the very last music game I ever buy

  • XT-inc

    Posted Nov 5, 2009 6:41 am GMT

    Maybe now they'll realize their dlc content is a rip off, if it was reasonably priced I'd buy a lot more of it.

  • poorisaac

    Posted Nov 5, 2009 6:31 am GMT

    Still waiting on Sitar or Mandolin Hero. Also Rock Band? Come on. How about Bluegrass Band? Sounds WAY better. Or Polka Band.

  • poorisaac

    Posted Nov 5, 2009 6:28 am GMT

    Glesniak FTW. This genre dug its own grave really. That horse died a couple months after Guitar Hero 3. But Activision AND Harmonix just kept hitting it.

  • OneBadLT123

    Posted Nov 5, 2009 6:23 am GMT

    Ahh yes, DJ Hero failing, GH5 failing, Band Hero soon to fail, Rock Band dying off...

    Finally this overdone genre of games is dying.

  • Warlord_Irochi

    Posted Nov 5, 2009 6:19 am GMT

    @ gnrlstuart:

    that's totally true... SURPRISE PEOPLE!! Company actualy make games to earn money! bet you didn't knew...

  • gamer_96

    Posted Nov 5, 2009 6:10 am GMT

    No...

  • Kajiuro

    Posted Nov 5, 2009 5:38 am GMT

    Unprofitable? Does this mean this series will FINALLY die?

  • LosDaddie

    Posted Nov 5, 2009 5:30 am GMT

    Most likely a non-issue. Viacom probably estimated too many sales of Rock Band in their budget

  • Dahorsh

    Posted Nov 5, 2009 4:34 am GMT

    I guess just like console flame wars, some people just can't resist trashing games that give other people pleasure, for whatever done-to-death reasoning. How exactly does it really fulfill your ego if you keep reminding folks the obvious fact that they're using recreation time playing a rhythm/karaoke 'game' instead of playing a real instrument? It's not like people who actually 'enjoy' RB/GH are being 'suckered' into something foul and pathetic. Better be careful with your reasoning because there are whole generations and millions out there who say that playing ANY type of video game is pretty pathetic and childish. You're on a pretty slippery slope if you start saying one type of video game: pretending to be a (God of war)(Space trooper)(Magic Plumber) is superior to another (music games) (Wrestling/fighting) (RPGS) or perhaps (SPORTS) (RTS) for example. We're all gamers. Just because gaming is more mainstream now, people seem to insist on forming cliques...like in high school, I think we should congregate to share our likes, not bash our dislikes. And as for the business side of things...well...as has been said, I can vote with my wallet.

  • SicklySunStorm

    Posted Nov 5, 2009 1:52 am GMT

    gnrlstuart - you're absolutely right. I'm sick of hearing people criticize a company for acting like a company does - business-like.

    at the end of the day, as a consumer you have the biggest voting power there is, with your wallet. Just don't buy their products if you genuinely hate them. Simple.

  • gnrlstuart

    Posted Nov 5, 2009 1:31 am GMT

    just to add to my statement below, activision may be milking the franchise with enless instrument and title updates and ugrades. but from a buisness perspective, they have organised the franchise in a sublime fashion compared to mtv/harmonix.

  • gnrlstuart

    Posted Nov 5, 2009 1:27 am GMT

    if the product line wasnt such a mess in europe, i think loads of people would buy it rather than gh5. as while rb is a better game and a better franchise, its instrument lineup, ( they are still pushing the original rb 1 instruments in london) is awfully organised compared to guitar hero's more complete, up to date package. and much less confusing to the customer, as the game is actually included with the instruments. its this atrocious organisation of the franchise across the whole of europe,asia and oceania that are losing them sales, and to be honest, if thier instrument/game lineup confuses a game savvy hardcore like me, how are the going to rake in the droves of clueless mothers, and spoilt children?

  • eyeball2452

    Posted Nov 4, 2009 11:23 pm GMT

    I wish the author here would link the actual transcript. I don't think the title really represents what the CEO was trying to say when he appears to have been talking about lower than expected margins vs actually losing money.

  • Waldkrieger

    Posted Nov 4, 2009 11:04 pm GMT

    Good. Rock Band, Guitar Hero are nonsense. Learn to play a REAL instrument and quit making fools of yourselves. I can't believe people pay all this money for that crap.

  • Bladescorpion

    Posted Nov 4, 2009 10:59 pm GMT

    good. real guitar >>> >> rb >> guitar hero

  • dragonmaster335

    Posted Nov 4, 2009 10:57 pm GMT

    How the hell is Viacom not making any money off of all the DLC RB sells? I made a similar comment in the other article about Beatles: RB not bolstering in much money but seriously...Well over 60 million downloads and they're not turning in a profit? You gotta be kidding me...I KNOW there are still plenty of people out there still buying plenty of DLC for RB2.

  • KittyHeart

    Posted Nov 4, 2009 10:56 pm GMT

    gh > rb btw... just imo

  • Trogeton

    Posted Nov 4, 2009 10:53 pm GMT

    This is old news.. I was just waiting for it to actually be announced activision is owning they already made 2 other franchises that are already making sales harmonix is dying quickly considering that 2 other rockbands were released this year after rock band 2

  • Glade_Gnarr

    Posted Nov 4, 2009 9:33 pm GMT

    Maybe if the games weren't so overpriced people would buy them, just look at the PS3 2 years ago and now.

  • jokoo

    Posted Nov 4, 2009 9:20 pm GMT

    This is an easy fix. Just bring your prices down a bit. I would never buy a rockband unplugged song for my PSP because the songs are $2. I can buy the song on itunes for a buck. Why would I want a gimped video game version that I can't play anywhere I go for 2x the price? I was thinking about buying beatles rock band package at game stop and it was $250! SCREW THAT! The game by itself is overpriced at $60. I am sure the production cost is way lower than a full fledged actual game. I know the money goes into licensing the songs, but they have to take that into consideration when producing the game. The video game market is so flooded now, especially with rhytm games. I can buy a sweet game for itouch/iphone for a $1-$10. Evolve with the times and LOWER YOUR PRICE!

  • Zerosumgame

    Posted Nov 4, 2009 9:20 pm GMT

    RB is getting old, don;t you think? People probably moved on to play real instruments now. F!

  • Scooter540

    Posted Nov 4, 2009 8:41 pm GMT

    If they want to get out of the hole then they've gotta go back to the basics;stop making rock band games with just one band highlighted,I've got nothing against The Beatles but playing a game dedicated just to them is only going to get the hardcore Beatles fans buying them.Rock Band 1&2 were great because they had variety.Break away from the GH mindset of just one band in a game and mix things up a bit.

  • lifegivith

    Posted Nov 4, 2009 8:37 pm GMT

    @kytomasi you have a great point these guys have been in the bis for a long time and they still dont know that.

  • kytomasi

    Posted Nov 4, 2009 8:25 pm GMT

    I think Rock band been profitable since RB1 released. lol Its taken how long for them to finally see negatives? come on, its not because its "saturate" its probably because everyone that wanted it has it or played it enough lol. Thats like saying Ohhh Halo 3 and the Halo Franchise is unprofitable in Q3. lol No s*** the game been out forever. lol it wouldn't keep selling great forever.

    lol i also like how more and more people saying "saturate" then "milk" now. what someone just learned that word or something?

  • kytomasi

    Posted Nov 4, 2009 8:18 pm GMT

    oh da**. When Rock band starts taking hits you know **** is hitting the fan. lol

  • zyxomma100

    Posted Nov 4, 2009 7:57 pm GMT

    TheProfileth, that's your problem with license management with your DLC, and it affects all games, not just Rock Band. If it's because you got a new console (like if you had one repaired by MS), then redownload everything. It only takes a few seconds because only the keys need to be regotten, and it fixes all problems. Otherwise, do a search for 360 license transfer.

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