Can celebrity power save a troubled industry?
According to market research firm NPD Group, US sales of videogame hardware and software fell for the sixth straight month in August, down 16 percent to 908.72 million dollars. Of all genres, music video games were the weakest, down 46 percent year-to-year as of July.
Media conglomerate Viacom, anxious to salvage its troubled music video game franchise “Rock Band” (which caused a 41 percent decline in ancillary revenues to its Media Networks division, per the company’s 2nd quarter filings), placed its bet on timeless celebrity: the Beatles. The Los Angeles Times reports that Viacom paid Beatles rights holders an unprecedented amount to include the band members’ songs and likenesses in “The Beatles: Rock Band,” released September 9.
And from the looks of it, that bet is paying off. "Sales have exceeded our internal projections and we’ve sold 25 percent of our inventory in the first week,” says Viacom CEO Philippe Dauman at the recent Goldman Sachs Communacopia Conference (as reported by The Financial Times). The company expects the operating profit margin for the Beatles game, which also has special edition hardware bundles and additional downloadable songs for sale, to reach 20 percent.
It’s a strategy shared by Activision, which publishes the pioneer – and current market leader in music video games – “Guitar Hero” series. With “Guitar Hero 5,” launched September 1, users can play 85 hit songs, using avatars modeled after music icons like Johnny Cash, Carlos Santana and Kurt Cobain. While data on US sales won’t be available until next month, tracking firm Chart-Track reports that “Guitar Hero 5” debuted at top spot on the weekly UK charts, while “The Beatles: Rock Band” took fourth place.
Guitar Hero CEO Dan Rosensweig is confident that more growth is foreseeable for both the “Guitar Hero” franchise and the music video game market. "Less than 20 percent of console owners have a music game. So, there is an upside,” he tells The Hollywood Reporter. “Also, we are only two years into (the franchise’s launch) in Europe. And we haven't even started thinking about Asia yet. There's plenty of growth left."
Indeed, The Los Angeles Times reports that Activision is planning to launch other music video games such as “DJ Hero” and “Band Hero,” which will include songs from popular artists such as Taylor Swift, the Jackson 5 and No Doubt. Meanwhile, the team behind “Rock Band” (music video game developer Harmonix, Viacom’s MTV Games, and distributor Electronic Arts Inc.) recently announced shipment of “Rock Band Metal Track Pack,” to retailers nationwide. The standalone disc offers 20 tracks specially chosen by heavy metal icons such as Godsmack, Children of Bodom and Judas Priest.
Celebrity power can only take the industry so far, however. If the music video game market is to continue growing, companies have to continue to innovate, says Jesse Divnich, Director of Analyst Services at video game industry research firm Electronic Entertainment Design and Research (EEDAR). “It would be erroneous to assume that any franchise or brand can grow unless it brings something new to the table,” Divnich writes in IndustryGamers.com. “Even if DJ Hero and The Beatles propel the respective series forward, as both are looking to be strong commercial successes, one still has to ask, where do we go from there?”
