Wall Street Journal reports that Rock Band developer was purchased for less than the cost of a single game--plus the taking on of all liabilities.
In 2006, MTV parent Viacom bought Harmonix for $175 million in cash. In late 2010, it sold off the money-losing division for a substantial discount. According to the Wall Street Journal, the late December sale of the Rock Band developer to private holding company Harmonix-SBE Holdings LLC was for a price point of just $50--$10 less than the PlayStation 3 and Xbox 360 versions of Rock Band 3.
Of course, the low price point isn't the whole story. The Journal reports that in addition to the $50, the deal called for the purchaser, an affiliate of New York-based investment firm Columbus Nova, to assume all of Harmonix's liabilities. Though an exact figure for said liabilities was not provided, it would include the Boston-based developer's music rights fees, as well as the value of existing Rock Band game inventory.
The deal had an apparent upside for Viacom, though, as it reportedly allowed the multimedia multinational to take a $150 million tax write-off.
If you have a problem with what the companies do to evade taxes, then your real problem should be the loop holes in the law that allow it. Not the companies themselves.
@NFSruler You, my friend, are a genius! Rock Band: Weird Al? All of the same songs minus the rights! Just pay Al like $1000 bucks a month to keep making parodies and everybody is happy! Exclamation mark!
$50 is just a number, you see houses in the paper sell for a $1 because they dont want to release the actual cost.i think the same thing here.
Please list your sources Blackace, I'm curious to see where you got that information so that I can see the details.
Narv1ck Posted Jan 5, 2011 10:21 am PT This is actually a bit confusing the way it's written because this article leaves out key details and doesn't show all the facts or create a clear picture. There is a previous story that needs to be linked. Harmonix bought ITSELF back from MTV for $50, Harmonix wanted to be independent again. That's the REAL story. -Google is a wonderful thing- ********************************************************** Yes, that's pretty much what they did and they used investment firm Columbus Nova to own all liabilities. So most likely Harmonix will be paying this firm with whatever profits they get from Rock Band or whatever games they decided to make. The musically genre is a dying breed now though. They will never sell 7-8 million like they did when this generation was just starting out. They'll have to come up with something original now.
and liabilities..... ie millions in fees and copywrite infringements lets start a company, make quick cash, than backpeddle and dissolve all responsibility
so i could have owned the game developer instead of the game! Guess i can chalk it upto bad life choices.....
This is actually a bit confusing the way it's written because this article leaves out key details and doesn't show all the facts or create a clear picture. There is a previous story that needs to be linked. Harmonix bought ITSELF back from MTV for $50, Harmonix wanted to be independent again. That's the REAL story. -Google is a wonderful thing-
@345tom As I said before that is thebest way to go and not with RB Beatles and Greenday, or GH Aerosmith and Van Halen. Don't get me wrong I am glad they have such great bands involved, but with them constantly releasing these without actually game upgrades doesn't help, that's why I said DLC is the best to go for just tracklistings unless the system doesn't go for DLC songs aka Wii and PS2. This way there is no more flooding the market and they can release only the hard copy titles that are actually different from the previous title, like boss battles or a new instrument.
@ IrshDrkWlf, Most Harmonix games mainly release DLC. I mean its been about a year since the last Rock Band. The DLC market for it is at 1,220 songs, with most of the songs from each game also transferable.
Obiviously there is more to this story than purchase for $50 even more so when there was interest from other companies.
Good thing about the tracks being DLC only is when they do release and new title that is different than the previous one, it isnt to difficult for the tracks to be ported to the new title. It is just getting tiresome everytime I see a band specific GH or RB. When GH first came out, the first 3 titles were actually improved and were different from each other; when the GH creators created RB is was different than GH. Then GH has World Tour which was different and had more features than RB. RB2 comes out other than instrument imrpovements not as much changed besides the track listing, RB3 at least had added a new instrument to the mix. Its almost like some of the sports titles that only change the roster and not much else the following year, to actually get a better version you have to wait for every other title.
My interest in games such as rock band insantly died when I found out I have to buy "instruments" to play the game. Comes way cheaper to just buy the album of my favourite band.
@CalienteBurito I didn't say they made bad games just that they flooded the market. Focusing more on the DLC than putting out the same game with different tracks would have eased the flooding. Most of the titles that have come out were identical to the previous just with different tracks. Activision is guilty of flooding the market just as much as Harmonix is. The only way to prevent this would be to slow down on hard copies unless they are going to actually change more than the track listings, new tracks can just be DLC.
see got gd review and no one brought the game so if they didnt had a buyout Harmonix would gone for gd so hope it doent repeat with the new one that they got to change the rock band series
If the business didn't get sold, Harmonix would of been bankrupt and everything would of loss loads of value and would of done more harm then good. The fact that Harmonix got sold at this time, shows that they're willing to do anything other then filing for bankruptcy. If that happens, NO ONE will buy from them. It was better now then later. A slow start but for the best to keep Harmonix in the good rep zone.
Since the amazing sales of all RockBand's and its substantial iterations. Where the hell did all this debt come from? What have I missed?!
@DSfanatic5 I think the music game genre has a better chance of surviving then tony hawk considering the music genre has done more new things. Considering how Rock Band 3 introduced the keyboard and dance central tracks movement I think the music genre will be fine if studios like Harmonix keep putting out new ideas.
So, Viacom bought Harmonix for 175M, bled it dry and then sold it off for 150M? That's not a bad investment right there, they probably made a couple of hundred of Ms.
Many gamers has either confirmed their age or their lack of knowledge. 50USD + liabilities = 150million +. Thus it wasn't sold for 50 bucks and you guys think you can own it! :) I doubt most of you have heard of Baring Bank in the UK? ( A private bank that was sold only for one pound ) Happy gaming
Seriously, when are these plastic guitar games going to end? I've been gaming sing 1985, and have never desired to play these games. I can respect their addictive qualities, and the fun that groups of people can have when everything falls into place, but they're growing tired fast. I base this on my experience at work, and it seems that the equipment is either defective out of the box, or becomes defective after minimal use. I feel this genre is going the way of Tony Hawk. At one time it was great, but they'll bleed it dry until it becomes an embarrassment to gaming in general, plastic skateboard or not.
Did the people commenting about the "cheapness" of this sale actually read the article? Granted the $50 is not much, but they also take on ALL of Harmonix' liabilities...including the licensing fees.
Every game Harmonix has made since Guitar Hero has been a hit, if not a huge hit. Ok, maybe DJ Hero didn't go platinum, but that single game couldn't be enough undo the success of three Rock Band games. They're essentially immune to pirating since their games always require special hardware. Sure, they use some big name music, but they use a lot more junk tunes no one has ever heard of before playing their games. And they sell insane amounts of DLC, which has the greatest profit margins in the world of gaming.
If they're really losing money, then it's because of horrible mismanagement (like awarding themselves monster paychecks and company cars after the break from Activision), or embezzling, or some other form of squirreliness.
@MMaestro: "This whole deal reeks of shady corporate backdoor dealing. Rock Band is profitable. The Rock Band store is profitable. Therefore HARMONIX WAS PROFITABLE. YOU DON'T SELL PROFITABLE DIVISIONS FOR $50!" It's profitable, until you factor in that the music they use in their games doesn't belong to them, and therefore they have to pay a fee to the owners to use it. In this case, assets minus liabilities equals about zero (probably less), so the holding company just pays $50 to make it a nice and legal sale. Nothing shady about it.
Even though they were bought for 50 bucks, All the music licensing rights and remaining products will cost them millions. It makes sense that they were bought for so little.
I have more than that in my wallet...how does a game developer get sold for so little? that's some seriously shocking news. I thought Rock Band was the creme de la creme of Music gaming.
I hope to high hell they don't get liquidized. This wonderful game studio deserves far better than that.
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