Rock Band franchise unprofitable in Q3

By Tom Magrino, GameSpotPosted Nov 4, 2009 10:44 am PT

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.

125 Comments

  • joeisnub

    Posted Nov 8, 2009 1:27 am PT

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

  • GDCalibur

    Posted Nov 6, 2009 4:20 pm PT

    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 PT

    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 PT

    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 PT

    @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 PT

    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 PT

    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 PT

    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 PT

    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 PT

    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 PT

    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 PT

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

  • Elvis4576

    Posted Nov 5, 2009 11:11 am PT

    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 PT

    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 PT

    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 PT

    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 PT

    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 PT

    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 PT

    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 PT

    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.

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