Already rumored on several blogs, Warner Bros. and its many partners today revealed that "Lego Rock Band" is indeed real and coming out for the holidays.

Talk about a marketer's wet dream: You've got two of the biggest brands in the video game world merging along with two of the biggest genres (music and kids/family). This is one of those games that won't take any explaining in the advertising: the name says it all. And practically guarantees good initial sales.

When you think about it, "Lego Rock Band" is the perfect complement to this fall's "Rock Band: Beatles Edition." The latter is looking to extend the franchise's demographics older and the former to move them younger. In both cases, they could help to ease Viacom's "Rock Band"-related financial woes -- Despite solid sales, the games have so far been money losers.

All the merging makes for quite a complex business deal, however. Warner Bros. is publishing the game. Its wholly owned subsidiary TT Games, which has the rights from the Lego Group to make video games based on that license, is developing "Lego Rock Band." MTV is essentially serving as the licensor here, giving Warner the rights to make a game based on its video game brand. And of course "Rock Band" developer Harmonix will be consulting.

What will "Lego Rock Band" be? Essentially "Rock Band," but with adorable, fully customizable characters, and more family-friendly songs like Carl Douglas' "Kung Fu Fighting" and Pink's "So What." No Ramones or Beastie Boys in this game, I'm betting.

I've confirmed that it will be compatible with all the existing "Rock Band" instruments (and probably most of the "Guitar Hero" ones). No official word on whether there will be any unique guitar, drum and microphone controllers made out Legos (or faux Legos), but , c'mon. The odds of that happenings are about the same as the odds of there not being any new "Guitar Hero" games this year

In its last earnings call, Viacom admitted that "Rock Band" has been a money loser because of the high cost of producing the instruments. The profit is in the software, Chief Financial Officer Tom Dooley explained, and now that there's a good amount of hardware deployed, MTV is hoping to turn the franchise profitable by selling more software to those of us who have instruments. Or to use a familiar analogy, "It’s the razor, razor blade phenomenon. You’ve got the razors out into the marketplace and sold now we have to push the razor blade through."

Meet your newest razor blade: "The Beatles: Rock Band."

When MTV and Beatles music publisher Apple Corps. announced plans to make a game in the fall, they said very specifically that it would be a stand-alone game not affiliated with the "Rock Band" franchise. The implication being that they Beatles were simply too big for the "Rock Band" brand.

But MTV has apparently convinced them otherwise. In part because of the exact phenomenom Dooley described -- A game not affiliated with "Rock Band," which might require (or be connected in consumers' minds to) new hardware, would be a lot tougher to make profitable. Especially given the huge royalties MTV is paying Apple to get the Beatles rights.

In this economy, Viacom can't afford that. A game very specifically designed to work with existing "Rock Band" instruments is a much better sell for the struggling cable conglomerate, both for branding and profit margins.

MTV, through EA, is releasing the game on September 9 (9/9/09 -- get it?). No exclusivity deal like "Rock Band 2," which came out for Xbox 360 a month before Playstation 3. And no delays for the Wii version, as with "Rock Band 2," when it basically missed the holiday season by coming out Dec. 18. Harmonix has its act together on the world's most popular current-gen videogame console, the one that has proven the best seller for Activision's "Guitar Hero," and will release it simultaneously with the other 2 consoles. Which makes a lot of sense given what a mainstream demographic a Beatles game is intended to target. No Playstation 2 version however, even though that proved the second most popular console for "Guitar Hero: World Tour."

And there's even more ways MTV is looking to turn the Beatles game into the profit machine "Rock Band" hasn't been. You know how Wii games usually cost $50? "The Beatles: Rock Band" for Wii will cost $60. MTV is trying to be the publisher that finally gets Wii pricing in line with Xbox 360 and Playstation 3, despite the lower costs of development and the more casual audience.

There will be specialized instruments "modeled after instruments used by John Lennon, Paul McCartney, George Harrison and Ringo Starr throughout their career," but they'll cost more. No more red ink on the hardware either. The stand-alone guitar for "Rock Band 2" costs $70. For "The Beatles: Rock Band," it'll be $100.

And the premium bundle? The one with a guitar/bass, drums, a mic, and the game? That's coming in at a whopping $250, a full $60, or 32%, more than the same offering for "Rock Band 2."

MTV's deal with the Beatles was an unmistakable sign that it's willing to spend big to bring its music games to a very broad audience and vanquish "Guitar Hero." But today's announcement about the release details is an unmistakable sign that it's determined to use that deal to turn "Rock Band" into a profitable franchise.

Update: I asked an MTV rep why they changed their mind and decided to turn the Beatles game into a "Rock Band" spin-off and got this response: 

During our initial announcement, we said that this game will be a custom standalone dedicated game experience and completely brand new production that will be an unprecedented, experiential progression through and celebration of the music and artistry of The Beatles. And that is still very true.

The decision to include the Rock Band name in the title was a collaborative decision by Apple Corps, The Beatles, and MTV Games and Harmonix. As we moved through the creative process, it just seemed to make sense to clearly highlight the association between The Beatles game and the critically-acclaimed Rock Band franchise.

Tough negotiations between the music biz and MTV could leave "Rock Band" without new downloadable tracks from one of the big four labels.

Billboard is reporting that MTV and Warner Music have been unable to reach agreement on a single deal since WMG chairman Edgar Bronfman decided last summer that his company deserves bigger royalty rates for music video games. The two sides have traded offers and haven't reached a compromise. For now, reportedly, there's content coming through the pipeline, but it'll be all out by early summer.

That could be a major blow to "Rock Band," which has prided itself on the wide array of tracks available to download, much more than for "Guitar Hero."

Given the tough business deals that Activision negotiates, you would think it would be in the tougher position with Warner. But it's apparently doing fine with Warner, as evidenced by the upcoming "Guitar Hero: Metallica" (a Warner Music act)

Of course, as I reported a few weeks ago, MTV is already losing money on the "Rock Band" hardware. If giving into WMG's demands (thereby probably triggering higher royalties to the other labels) would mean losing money on the DLC as well, I can see why it's playing tough. Some part of that franchise has to actually make a profit.

Jay Cohen is taking over Jerry Bruckheimer and MTV's video game joint venture in hopes of kicking the year-old but still nascent operation into high gear.

As reported last week, the former senior VP of publishing at Ubisoft left unexpectedly with indications he would be working with a more traditional entertainment company here in L.A.

Now numerous sources have confirmed that the Cohen's new employer is the game studio formed by MTV Games and Jerry Bruckheimer Films (the company behind some little franchises like "Pirates of the Caribbean" and "CSI").

The hiring answers the 15 month-old question of what exactly is going on at the company, which launched in December of 2007 as a way for Bruckheimer to bring his brand to a new medium and MTV to expand its slate beyond "Rock Band."

Since then, radio silence. No announcements of projects in the works and not even rumors here in Hollywood about stuff going on.

But it looks like Bruckheimer is finally ready to get things going. As I reported when Cohen left Ubi, he's one of the top decision makers in American videogame publishing, so he certainly has all the connections and experience necessary to work with developers and make AAA titles.

Neither Bruckheimer nor MTV have commented (yet), so there's no indication of what the next steps will be (more hirings? deals with developers? titles getting the green light?). At the time the mega-producer made his deal with the cable conglomerate, he indicated he wouldn't be making games based on his movies and TV shows (since the rights for those are mostly owned by the studios), but rather looking to do original stuff. The plan is that just as Bruckheimer's name means something in movies and TV, it can do the same for video games.

If successful, it would be a first, since no individual or company has really cracked the nut of being a "producer" for video games the way people regularly produce movies and TV shows (i.e. sheparding development and production without being an employee of the studio/publisher). Now it's up to Jay Cohen to see if it's possible.

(Part of our series counting down the top ten videogames of 2008 -- with interruptions for the most disappointing and most overrated -- according to Variety critics Leigh Alexander, Tom Chick, Chris Dahlen and Ben Fritz. Full details are here. To check out the rest of the list, click here. Most importantly, vote for your favorite games of 2008 in the Cut Scene reader awards here.)

Leigh Alexander

Mega Man 9 (Capcom / Inti Creates)

In today's era of blisteringly sharp next-gen, why on earth would Capcom ape the NES era -- staticky scan lines, brutal difficulty and all? Because, given that today's audience endlessly compares new franchise installments to their rosy memories of ancient predecessors, it's a damn great idea to just give them what they want. "Mega Man 9" reminded most players what a feat it was that they fell in love with such a punishing medium, re-instilled the youthful love of frustration -- and beyond nostalgia, actually managed to show off some of the best level design the series has ever seen.

Tom Chick

Patapon (Sony / Pyramid)

No game this year that had me grinning as consistently as I grin when I play "Patapon." I love these little guys, and in return, they love me. They dance and sing for me. They talk to me. As I drum them their rhythm, which is really all the gameplay there is here, their little eyes roll around. They jump and sway. They charge forward. The colorful sky fills with their arrows. I feel terrible as they're stamped into the ground or stabbed by evil patapons. I consider which one gets which hat and which sword. I dole out horses carefully. Did I mention that I love these little guys? The simple fact about "Patapon" is that it makes me happy. Not since "Katamari Damacy" has a game been so purely and simply joyous.

Chris Dahlen

Rock Band 2 (MTV and EA / Harmonix)

A strong platform saw key improvements. The single-player band mode made it easier for me to play alone; the no-fail mode and freestyle drum trainer made the game accessible to my three-year-old. (Who doesn’t dream that their kid will grow up to be a drummer?) And the addition of hipster essentials like "Mission of Burma" to the music store proves yet again that Harmonix is staffed by genuine, signed-in-blood rock snobs – just the way I like ‘em.

Ben Fritz

World of Goo (Various / 2D Boy)

Plenty of games nailed “cute” this year, but “World of Goo” dismisses that for something much harder to achieve: atmosphere. A simple building mechanic is tied to an impressively diverse set of puzzles, making this a game worth playing even if it was set against a blank white wall. But its the sinister music, the off kilter designs and those disturbing notes from “the sign painter” that bring to mind the delectably unlikely influence of “Edward Scissorhands.” Who knew little green balls of goo could be so creepy?

Coming Friday: The most disappointing videogames of 2008

Coming Monday morning: The fifth best videogame(s) of 2008

Coming tomorrow: Christmas.

One other important detail from our story about MTV's new Beatles game that I forgot to include in yesterday's post: The game will get 45 songs from the band's 1962-69 tenure with label EMI.

That of course covers almost everything the band did, as far as I can tell. The only people left unhappy might be thsoe who are really into 1970's "Let it Be." Though of course now the big question will be which 45 songs? We'll probably be waiting a long while to find out.

(Thanks to Joystiq for noticing something I didn't in Variety's own story. Yesterday was a very long day.)

That's probably not a surprise, but Variety's crack music reporter Phil Gallo got details on just how MTV managed to get the much sought after rights to translate the most popular band of all time into a videogame. Here's the relevant excerpt from his story:

Sony/ATV handles the music publishing of the vast majority of songs written by Lennon and McCartney.

The music publisher was the last to sign the [Beatles videogame] deal, and while no financial figures were released, [CEO Martin] Bandier said Sony/ATV asked for as much as possible.

"There have been mutterings from artists and songwriters that they are not being offered their fair share in videogames, but the gamemakers have the leverage," he said. "In the world of rock, there are thousands of tracks that will work, but when you get into the world of unique artists, that leverage shifts, tremendously, to the artists and songwriters.

"We signed a deal that would be considered very rich by the videogame company but fair for the artists. It will have online implications that will be enormous."

With the Beatles inking a deal for a videogame, it leaves one key holdout from the classic rock era, Led Zeppelin. The British hard rock quartet, rumored to be reforming without lead singer Robert Plant, was one of the first acts approached when "Guitar Hero" was in prototype form. Then, and now, they have rejected uses of their songs in games.

The Rolling Stones moved their post-1970 catalog to Universal Music Group earlier this year, and the music conglom said digital was a priority, suggesting a dedicated game is likely.

Given that Universal Music Group and Activision are both part of the same happy Vivendi family, how much do you want to bet that means we'll be seeing "Guitar Hero: Rolling Stones" in the not too distant future?

Which brings up one interesting question: Why are the Beatles getting their own unique game and not "Rock Band: Beatles Edition?" One possibility is that the Beatles are so (self?) important that they demand/deserve their own game in which their music doesn't mix with other artists.

The other possibility is that, since Activision surely went after these rights hard, Apple Corp. (administrator of the Beatles catalog) decided it didn't want to be accused of taking sides in the "Rock Band" - "Guitar Hero" war, so it just sidestepped the whole mess.

Full story: MTV cues up Beatles videogame

After reading the brief New York Times article today and then the press release about "AC/DC Live: Rock Band Track Pack," I found myself still wondering exactly what the game is, how it works, and why MTV is choosing this route. So I spoke to the cable conglomerate and budding videogame publisher's Paul DeGooyer, senior VP of electronic games and music. Here's what I learned about what "AC/DC Live: Rock Band Track Pack" is, what it isn't, and why it exists:

-It contains 18 songs (listed below), all recorded live from the famous Castle Donington Show in 1991. None of the songs are from the band's new album "Black Ice." As the Times already reported, both the game and the album will be available exclusively at Wal-Mart.
(Those of us in the rare position of not living near a Wal-Mart will just have to buy it online, I suppose.)

-AC/DC is now exclusive to "Rock Band" for "a term." No idea how long that term is. But just as Aerosmith is exclusive to "Guitar Hero" for a while after its eponymous game, MTV has a similar deal with AC/DC. That deal has resulted in this expansion pack and also the inclusion of "Let There Be Rock" in "Rock Band 2." No word on whether there will be future AC/DC songs for the "Rock Band" platform, either on discs or available to download, as part of the exclusive deal.

-Unlike "Guitar Hero: Aerosmith Edition," you don't play as the band. You're covering AC/DC, just as you do every other group in "Rock Band." "There are some custom graphics," explained DeGooyer, "but we really don't think people are looking for little avatars and that's why it's not a $59 game." (It's a $39 game on 360, PS3 and Wii, $29 on PS2).

-The game will feature some, but not all, of the functionality from "Rock Band " and "Rock Band 2." All four instruments (guitar, bass, drums, mic) are used, you can "tour" through all 18 songs on your own or in a group, there are score duels and tug of war. However, there's no online capability. If you want to play with your friends, you have to be in the same room. In addition, there's no character creator. I would assume there are set characters you can choose from instead.

-All 19 tracks can be transferred onto a PS3 or 360 hard drive free of charge in order to import them into "Rock Band" or "Rock Band 2." Then they show up like any other downloaded tracks and can be played with all of the game's modes, online or offline.

But this can only be done once per disc. That's MTV"s way of preventing someone from sharing a disc with friends, or re-selling it, and essentially engaging in piracy. Seems reasonable to me. Given that songs cost $2 to download online, 18 tracks for $40 is just slightly more than it would cost to buy them online. Not the best deal ever, but not a rip-off either.

-DeGooyer says that AC/DC members chose to put the "Live at Donington" songs in the game and that MTV enthusiastically agreed. "To us it hung together more than cherry picking master recordings," he said. "It really is an experience. You put the disc in and you play through a live set."

-No specific word on whether there will be more expansion tracks along these lines. But launching a game like this in concert with an album as part of a big retail promotion fits in with MTV's strategy of integrating "Rock Band" into the overall music business so that a videogame component becomes a natural part of any product launch or marketing push.

"This is a huge statement about our platform and how meaningful it has become," DeGooyer commented "We want to be an authentic component of the music business. If a band is trying to get something done, if they've got a great new record or are going on tour, we'd love to be working with them. It could be a DLC pack or something more like this, which is all the bells and whistles."

-Not sure of the answer to my favorite question after dealing with the one major annoyance of "Rock Band 2": Do you have to play through the tour to unlock all the songs? Or are they all available as soon as you turn the game on? Update: I got the answer. All the songs on the disc are immediately available. They don't need to be unlocked.

-Here's the game's set list, which is the exact same set list as "Live at Donington" for those who own the DVD (or, as in the amazing case of one person I know who was bragging today, were there):

"Thunderstruck"
"Shoot to Thrill"
"Back in Black"
"Hell Ain't a Bad Place to Be"
"Heatseeker"
"Fire Your Guns"
"Jailbreak"
"The Jack"
"Dirty Deeds Done Dirt Cheap"
"Moneytalks"
"Hells Bells"
"High Voltage"
"Whole Lotta Rosie"
"You Shook Me All Night Long"
"T.N.T."
"Let There Be Rock”
"Highway To Hell”
"For Those About to Rock (We Salute You)”

I may be the only one, but I've been wondering what would happen to all the music in "Rock Band 1" now that "Rock Band 2" is out. Yes, people who own "Rock Band 1" can transfer those tracks to their hard drive and use them in the sequel for $5. But let's saw you are starting your "Rock Band" experience by buying the new #2. You've got 80+ songs on the disc and hundreds available for download. What if you want to get "Blitzkrieg Bop" or "Gimme Shelter?"

I asked MTV and the answer is: buy "Rock Band 1." It and Harmonix plan to keep publishing the first "Rock Band" indefinitely. On the one hand, this is nice, since it keeps all those songs available to people who buy "Rock Band 2" (or future sequels and spin-offs, one would assume). But is it really the best option?

FIrst of all, it seems a bit confusing. After all, "Rock Band" isn't just a collection of songs. It's a videogame with modes and options that have all been improved and superceded in "Rock Band 2." For the casual fan (of which "Rock Band" has lots), this strikes me as fairly confusing: You can start the "Rock Band" play experience by buying either game and then downloading any tracks you want from online. But the gameplay experience is different and better in "Rock Band 2." If you buy the first edition, you can't get the songs on the sequel disc. If you buy the sequel first, you can get the songs on the original disc, if you pay an extra $5. That's a totally different model to understand than the a-la-carte downloads for all the other songs online. Huh?

The simple solution, which I had assumed MTV would adopt, would be to phase out production of the first "Rock Band" in order to drive sales of the superior "Rock Band 2" and then make all of the songs available on the first disc available to download. That way those of us who bought the first edition only have to pay $5 to keep those songs, while any new buyers will only get the best edition of the game, with the option to get every original "Rock Band" song from the same online destination with the exact same pricing model as every other available track.

Other old games stay on sale even when sequels come out, of course. You can still find the original "Halo" at your local GameStop or Best Buy. But "Rock Band" is supposed to be a "platform" according to MTV, not just a franchise. Which is why I think this melange of songs on disc and online with different costs and technical steps needed to put them all together is going to soon become a major pain.

Ever since Activision Blizzard announced it won't be publishing Double Fine's "Brutal Legend," amongst other Sierra games, the word I've heard most about the game's future is "MTV." The cable conglomerate, which publishes "Rock Band" and is developing games with uber-producer Jerry Bruckheimer, seems like a pretty natural publisher for a game about a heavy metal roadie voice by Jack Black. That idea also fits with what I heard from a good industry source who told me "Brutal Legend" was close to a deal with a company that's not a traditional publisher.

However, such a deal is not to be. In a very politic statement, MTV confirmed to me that it won't be publishing "Brutal Legend":

We are big fans of [Double Fine chief] Tim Schafer. We hope the game finds a good home.

That's all they had to say, but my reading of "PR-ese" is that MTV considered publishing "Brutal Legend," talked to Double Fine and its reps, but ultimately decided not to pick the game up and/or couldn't reach a deal.

So where will "Brutal Legend" end up? With MTV out of the picture, I've got no idea for the moment.

Update: Kotaku reports a rumor that EA will publish the game. That doesn't fit with what I previously heard that a non-traditional publisher would be picking up the game, but now that MTV has passed, things do change. However, unlike Kotaku, I don't think the game could be published through EA Partners. Unless Double Fine picks up some new financing, I don't believe it can afford to fund the development costs itself. Somebody probably has to pay back Activision Blizzard for at least a big portion of what Vivendi Games has spend on "Brutal Legend."

Today brought earnings from Viacom (owner of MTV, owner of Harmonix), Electronic Arts,  Sony, and United Business Media (owner of the Game Developers Conference). If you're interested in all the fun details, just click on those names and you can read Variety's entire story (except for UBM, which we don't cover).

But I thought it would be worthwhile to note a few interesting little details from those earnings for Cut Scene readers:

-Viacom says "Rock Band" has now sold 18 million track downloads. That's up from 15 million as of June 30, which means it has sold 3 million in the past month alone.

-Sony's videogame unit is finally in the black with PS3 sales and PSP sales growing and costs for PS3 production falling. Most impressive, however, was PS3 software sales. During the quarter Sony sold 22.3 million game copies, up from just 4.2 million in the same quarter last year.

-There was no mention of "Boom Blox" sales in Electronic Arts' earnings announcement. Though it touted 1.6 million units of "Battlefield: Bad Company" sold and said "UEFA Euro 2008" had a strong launch, EA didn't say anything about "Boom Blox" sales or even tout its good reviews. In a recent interview with John Riccitiello, he said that the game performed as expected and should sell solidly well into the holidays, but it doesn't seem like a strong vote of confidence to not even mention the game when touting achievements during the quarter. (See update below for more info)

-United Business Media, the conglomerate that owns and operates the Game Developers Conference, said GDC revenue was up 16% this year, which certainly fits with the packed feeling at the show and the general sense I and others have that that it's on the rise while E3 is on the decline.

Update: According to GameDaily, I missed in EA's conference call where they said "Boom Blox" has sold 450,000 units so far, which is a perfectly respectable first couple of months for a Wii-exclusive original game. So ignore my somewhat dire analysis above.

...was definitely Harmonix CEO Alex Rigopulos standing in the back of the balcony of the Orpheum theater with a big grin all throughout the "Rock Band" concert featuring The Who. (who are, I finally appreciated tonight, just as amazing as my mother and uncle always told me)

A few months ago Harmonix sued its former publisher Activision for allegedly not paying it proper royalties for "Guitar Hero III." That suit was dropped presumably to be settled out of court, but now Harmonix is on the receiving end of a music game related suit from one of its past publishers. Ahhh, the circle of life.

Konami, which  published Harmonix's "Karaoke Revolution" games, is suing the MTV-owned developer for allegedly violating its patents related to "simulated musical instruments, a music-game system and a 'musical-rhythm matching game,'" according to Bloomberg. Konami is demanding its fair share of the Benjamins, plus an order preventing Harmonix from using its patents. There's no indication of what such an order would do to "Rock Band' exactly, though I can't imagine it would be an easy fix.

Here's Harmonix's official response, according to Wired:

Konami's actions are extremely surprising. Unfortunately, successful products such as Rock Band can often become targets for baseless litigation. We have substantial defenses to this claim and intend to vigorously defend it.

How in the world did MTV/Harmonix manage to sell 6 million "Rock Band" track downloads so far? I ask not because the game isn't awesome (it is) or because there aren't some great songs to download (there are), but because the the downloads are so damned hard to find.

Until today, there was no way to access the downloadable tracks from the game. On Xbox 360, you had to go to the console menu, click on "game store," click "more" or "other" (something like that), click the "music" category, then click on  "rock band," then scroll through the available song titles . OK, that's not exactly the process, but it was definitely at least four clicks and a major, confusing pain in the ass.

Then when you find the songs, the information scrolls very slowly on the right before you finally find the name of the artist and whether it was a cover. Basically, it's a nightmare. The fact that people went through that six million times is amazing to me, and definitely a testament to how great "Rock Band" is.

That number's going to get a whole lot bigger now that MTV/Harmonix has finally released an update with a really well designed music store accessible from the game's main menu. Wired's Game/Life blog (from whom I stole the above screenshot) has a great rundown. Suffice it to say it's easy to navigate, has album art, difficult ratings, previews... it basically looks kind of like what we've come to expect from music download services like iTunes and Rhapsody.

It's a shame it took Harmonix this long to launch the store (albeit understandable given the crazy tight schedule for "Rock Band's" release) but at least they knew what they needed to do and got it right.

(This is also, it's worth noting, way better in design and depth of content than what "Guitar Hero III" offers.)

As I'm reporting in tomorrow's Daily Variety (and you can read now online), original "Guitar Hero" developer Harmonix has sued the game's current publisher Activision for more than $14.5 million in allegedly unpaid royalties. But between the time I started reporting the story this morning and when I finished up this evening, Viacom (Harmonix's corporate owner) withdrew the suit.

Essentially, the now defunct lawsuit claims that under Harmonix's agreement with RedOctane (the first publisher of "Guitar Hero," which was subsequently bought by Activision), it is owed the higher of two royalty rates if any sequel that it doesn't develop "incorporates, uses, or is derived from Harmonix property." In addition, when that happens, it is also supposed to be paid a royalty on any related revenue from song downloads, in-game advertising, consumer products, etc.

However, if there's a "Guitar Hero" sequel that doesn't use any of Harmonix's work, the suit says, the developer is owed a lower royalty rate, half of the higher, and doesn't get any cut of song downloads and other ancillary products. Harmonix claims that Activision is trying to pay it the lower royalty rate -- which would mean Neversoft essentially built "Guitar Hero III" from scratch -- but it is owed the higher rate. That translates into $14.5 million and counting from "Guitar Hero III," an unknown amount of money from song downloads and other products, and future losses that "will mount at the rate of tens of millions of dollars per year."

Activision isn't admitting that it did anything wrong and in fact its general counsel told me "Activision believes that it has made sufficient payments to Harmonix and the claims otherwise do not have merit." But it was apparently spooked enough that it has agreed to further discuss the issue with Harmonix, which prompted Viacom to withdraw the suit less than two days after filing it.

There are lots more details, but rather than summarize them all, I'll just encourage you to read my story on Variety.com.

Viacom's additional $208.7 million payment to Harmonix, on top of the initial $175 million, is quite extraordinary. That's a pretty sweet deal for Alex Rigopulos et al (not that they don't deserve it. And it's definitely a sign that MTV expects big things out of the developer beyond a long life for "Rock Band." But others have covered this issue pretty well, especially Newsweek's Level Up, so I'll direct you to them for a more thorough analysis.

However as I was researching Viacom's 10-K (its annual report to the SEC) to check the numbers myself, I noticed this interesting statement: "Harmonix’s latest game is Rock Band, which as of December 31, 2007 had sold over 1.1 million bundles since its launch on November 20, 2007." That struck me as curious, since I remembered something different when I covered Electronic Arts earnings in late January. So I checked EA's latest earnings report and sure enough: "The critically-acclaimed Rock Band had a strong North American launch on the Xbox 360, PLAYSTATION3 and PlayStation 2 -- selling 1.5 million copies."

I suspect there's a simple explanation behind this, since neither of these companies would be crazy enough to dissemble in a public statement and open themselves up to liability from angry shareholders (especially EA, since I don't think Viacom would be purposefully understating "Rock Band" sales.)

Still, 400,000 is a big difference. Which leaves us all wondering... just how many units did "Rock Band" really sell last year?