Rock Band blamed for lower Viacom revs

Conglomerate calls out MTV Games' rhythm game for Media Networks segment's 6% slide in Q4 to $2.33 billion; overall quarterly revenues reach $4.1 billion.


High-priced bundles are what Activision and MTV Games' rhythm-game empires were built on, but that foundation made for shaky ground in 2009. Yesterday, Activision Blizzard said its rhythm game business fell off 35 percent in 2009, and as a result, it would be trimming its 2010 music game release slate to just DJ Hero 2 and a new Guitar Hero game. The publisher also noted that the music gaming market is moving away from hardware bundles and toward stand-alone software sales.

The Beatles couldn't shift bundles to match pace with last year.
The Beatles couldn't shift bundles to match pace with last year.

Similar travails are in play at MTV Games' parent company Viacom. Reporting on its year-end results today, the media giant said that its Media Networks division, of which MTV Games is a member, saw revenues sink 6 percent to $2.33 billion during the October-December quarter. Viacom noted that it saw a 37 percent decline in ancillary revenues to $290 million, saying the slip "was driven primarily by lower sales of Rock Band bundles."

Though the Harmonix-developed franchise saw no main installment in the series last year, MTV Games did release Lego Rock Band and The Beatles: Rock Band. Notably, The Beatles: Rock Band was initially announced with Limited Edition bundles that contained look-alike instruments for $250. However, two weeks before launch, retailers also began to list Special Value Edition bundles with standard Rock Band peripherals for $160.

As part of its third-quarter earnings report, Viacom expressed enthusiasm over The Beatles: Rock Band's "strong" start, though it also noted that the franchise was not profitable during the quarter. Having launched in September, the game had sold 1 million units by the first week of December--a figure that was not enough to prevent layoffs at Harmonix.

As for the rest of Viacom, the media conglomerate saw revenues decline 7 percent on the year to $13.62 billion. Net earnings stood at $1.56 billion, up 5 percent year-over-year. The Media Networks segment--which also includes TV networks, such as BET, Comedy Central, and Nickelodeon--posted revenues of $8.29 billion, down 5 percent from the previous year. The group's operating income slipped 3 percent year-over-year to $3.12 billion.

During the October-December quarter, Viacom's sales reached $4.1 billion, a 3 percent year-over-year decline. Net earnings for the three-month period rose 43 percent to $663 million. Viacom attributed the performance to its Filmed Entertainment segment, specifically Paramount Pictures.

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