Music games off 36% this year, EA expects Rock Band sales down $400 million
Buried in today's Elecrtonic Arts earnings call (which I won't have time to fully report on for reasons that will be apparent soon; I recommend the Gamasutra write-up) was this amazing revelation from COO John Pleasants: Revenue for music/rhythm games was down 36% during the first quarter of the year and 42% in March, per NPD. As a result, EA has cut the gross sales revenue it expects from its EA Partner division, which distributes "Rock Band" for Viacom.
That's a huge decline. And keep in mind that there weren't any major music game releases during the first quarter of last year, while 2009 saw "Guitar Hero: Metallica" (albeit at the very end of March). As we started to see in late 2008, sales of "Rock Band 2" and "Guitar Hero: World Tour" must be down massively from the original "Rock Band" and "Guitar Hero III."
And while EA CEO John Riccitiello said he feels "really bullish" about "Rock Band: Beatles Edition," the fact that the company is expecting $400 million less in sales indicates just how big an impact continued sales of "Rock Band" through last year mattered, and how far "Rock Band 2" is lagging.
No wonder Viacom blamed a "challenging comparison to the particularly strong initial sales of the music video game Rock Band in the first quarter 2008," to put it mildly, for the 37% drop in its ancillary revenues (mainly "Rock Band") in its earnings for last quarter. And this comes after the revelation that even when it was selling well, "Rock Band" lost money for Viacom due to hardware manufacturing costs.
And no wonder Activision Blizzard CEO Bobby Kotick recently brought in a heavy hitter, former Yahoo COO Dan Rosensweig, to oversee its critical "Guitar Hero" business.
Given the high price of music games, of course, it's hard to know how much of the decline is recession-driven. But with declines that dramatic, there's clearly something bigger going on. Consumers are getting tired of the slew of new music games. And/or they're happy with the ones they already have. And/or everybody who wants "Rock Band" or "Guitar Hero" has it. The market may not expand as broadly as many in the industry have been better.
Chris Morris reports on the business and culture of video games and offers analysis of recent events and industry trends.
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interesting post. It will fun to see whether DJ Hero can have the same kind of widespread appeal.
Posted by: Music Games Fan | June 19, 2009 at 11:47 AM
My brother is an avid fan of Guitar Heroes while I suck on that game. Anyway, it's sad to know that some video game companies do experience the effect of recession. Well, at least the makers of WoW doesn't seem affected where in fact they made it to the top. Hopefully, EA would be able to surpass this asap.
Posted by: world of warcraft gold | May 18, 2009 at 01:00 AM
I think Rock Band / Guitar Hero are seeing the Wii Play / Wii Fit phenomenon here. Consumers buy the game for the peripheral, and as long as the peripheral doesn't break, it's hard to justify sizing up from the '07 model to the '08 model. The logical step for a consumer wanting more music is to buy from the included online store, which is doing quite well I hear, not to buy an entirely new game that may not even work with their peripheral.
A joint marketing campaign encouraging customers to buy every Rock Band AND Guitar Hero disc - keep your old plastic guitar! - would help, but it may be too late for that.
Posted by: Rob Marney | May 07, 2009 at 09:04 AM
I just don't think there is a market for an annual or even bi-yearly update for these games. Their best bet is to maximize profits from selling more songs.
Posted by: Brian Woods | May 06, 2009 at 01:16 AM