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.
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.Watch the video