MTV Games parent company Viacom has reported its holiday earnings, and sales were down 3% to $4.1 billion, even with net income increasing to $694 million. Lower revenues for the quarter were attributed in part to slumping sales of the Rock Band franchise. Even though Beatles: Rock Band outsold Guitar Hero 5, the overall music genre was down 46% last year, and Viacom took notice.
MTV Games may soon be feeling the brunt of Viacom's wrath, as Viacom CEO Philippe Dauman said on a conference call that the company is looking into reducing costs at its games unit - layoffs weren't mentioned, but you never know. MTV Games and Harmonix will need to focus more on software than peripheral hardware. In some ways, the company is already doing that with a strong focus on DLC and the launch of the Rock Band Network.
"It certainly was a challenging year in 2009 for the video game industry in general, and certainly the Rock Band franchise," Dauman lamented [thanks Gamasutra]. He added that "The music industry will have to assist this category to make sure it can continue on a profitable basis in the future." The royalties have always been a contentious issue between the game publishers and the music studios. Dauman said that Viacom will now need to be more "selective" in the music it signs for Rock Band, based on royalties.
Declining Rock Band sales in 2009 also seem to have sparked Viacom executives to examine their agreement to reward Harmonix founders. According to a company 10-K, Viacom is now asking for a refund on the 2007 earnout payment to the Harmonix founders [thanks paidContent.org]. When MTV Networks first bought Harmonix, the developer was promised earnouts based on its performance in 2007 and 2008. Viacom gave Harmonix shareholders a payment of $150 million related to the studio's 2007 performance. Today, however, the company says that “we believe that we are entitled to a refund of a substantial portion of amounts previously paid, but the final amount of the earn-out has not yet been determined.”
1 Comments
February 12, 2010
Good luck getting their money back!