Harmonix, the video game division which makes the Rock Band game line, is being let go by Viacom. We don?t know yet who is waiting in the wings to pick up the popular music video game. However, private equity firms and other video game companies are suspected.
Viacom bought Harmonix four years ago for about for $175 million, plus a later payment of $150 mil. Rock Band provides interaction with music for music lovers and gamers who can choose guitar, drums, vocals, or bass to start their own band. But the music has soured. Now, Viacom is ready to auction it off to the highest bidder. Activision Blizzard?s Guitar Hero has been pushing Rock Band?s profits down, resulting in lower revenues for Viacom.
Large inventories kept prices down, while costs were going up to produce the plastic toy musical instruments. Loses of around $65 million were quoted in the third quarter. Viacom?s net income for the quarter ending September 30, 2010 was $189 million, compared to $463 million a year ago. Their strength lies in cable-TV networks, such as MTV and Comedy Central. MTV, aimed at 12 to 34 year olds, boosted by "Jersey Shore" helped with ad income.
As to Rock Band?s lack luster performance, the Wall Street Journal quoted Philippe Dauman, Viacom?s chief executive as saying: "The console-games business requires an expertise and scale that we don?t have."