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Today is the day that the music died for media conglomerate Viacom. The company recently announced plans to sell its Rock Band development studio Harmonix. Despite an overwhelmingly positive critical reception for the studio’s music games, the high cost of producing the Rock Band instrument peripheral controllers contributed to a $65 million loss last quarter.
“Harmonix has and will continue to create terrific videogames,” explained Viacom chief executive Philippe Dauman. “But for us, it is about focus. The console games business requires an expertise and scale that we don’t have.”
According to The Wall Street Journal, Dauman said that Viacom is in talks with several potential buyers, but did not reveal when the deal is expected to close or Viacom’s asking price for Harmonix. In 2006, MTV, which is also owned by Viacom, purchased Harmonix for $175 million.
Electronic Arts is on the short list of suspects as a potential buyer for Harmonix. The publisher distributed the first three Rock Band titles as well as The Beatles Rock Band. But some analysts suspect that Harmonix would be a better fit for Activision. “We speculated several weeks ago that, given the declines in the music genre, it would make sense to (re)combine the Guitar Hero and Rock Band franchises, thus we believe Activision Blizzard is a potential buyer,” said Cowen & Company analyst Doug Creutz to GI.biz.
Wedbush analyst Michael Pachter agrees. “It would most likely be between EA and Activision, and the latter has more money and has more to gain by eliminating the competition,” said Pachter.
Harmonix representative John Drake insists the studio will continue to support its titles. “This morning’s announcement does not affect the ongoing work at the studio as we continue to support our existing franchises, Rock Band and Dance Central,” said Drake on the Harmonix forums.
Nov 11, 2010
Source: WSJ, GI.biz, CVG
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