The Cut Scene - Video Game Blog by Variety

The happiest person I've seen at E3

...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)

Harmonix goes from plaintiff to defendant

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.

Rock Band download store... finally

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.)

Harmonix sues Activision, then quickly withdraws

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 and EA disagree about how many units Rock Band sold

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?