Pachter: Activision right to buy Red Octane instead of Harmonix
by Alexander Sliwinski 
{ Apr 14th 2007 at 5:00AM }
Michael Pachter, managing director at Wedbush Morgan Securities, thinks Activision made the right decision, "Would you pay $150 million dollars for someone who ripped off [Konami's] Guitar Freaks? The game is fun, I totally respect Harmonix, I'm sure Red Octane turned to them [with Guitar Hero] and said let's figure out a way to rip off Guitar Freaks and help sell our peripherals ... I think at the end of the day, the MTV/Harmonix game [Rock Band] will be a good game, it will cannibalize market share. I think it's good for consumers and it'll make Activision and Neversoft work harder [on Guitar Hero III]."
The entire situation between Red Octane and its former developer Harmonix has become very complex. With Activision's purchase of Red Octane and MTV's purchase of Harmonix the two companies are on very separate paths. Red Octane has retained Neversoft to develop the next Guitar Hero. Red Octane retained all rights to Guitar Hero, including the look and -- most importantly -- the guitar.
Pachter says legal recourse is why Harmonix has been so tight about information regarding Rock Band, "Who do they think they are? Rockstar? Blizzard? They think they can just wait until the last moment to release information?" Pachter believes that Harmonix/MTV/EA are getting their lawyer ducks in a row before they show anything of the game. Harmonix stated in a recent telephone interview that even the peripherals for Rock Band will be developed by Harmonix, opening up a whole new world of hardware development for the company. Pachter, who previously was a lawyer for many years, says that if the look of Rock Band or the guitars (which may need to have "six buttons to be legally different") comes anywhere close to Guitar Hero's look or Red Octane's guitars that Activision will have every right to sue. Conversely, Harmonix has to figure out how to copyright the drum peripheral so that Red Octane doesn't begin development on their own version. Pachter does find the situation fascinating, "I guess what's interesting here is Harmonix/MTV telling us that this game, with its four peripherals and the game, is coming out in less than six months and yet we have no more details."
Activision spent $100 million dollars for Red Octane and Guitar Hero. With the millions of copies sold of the game and the guitar, Pachter says Activision is making their money back and Neversoft will have no problem developing the third iteration of the game. He says the pieces are already in place to bang out another sequel and points out that there's hardly any difference between the first and second game. Guitar Hero III will be a hit unless Neversoft strays far from the formula. Pachter believes if anyone made a purchasing mistake it was MTV with their $175 million acquisition of Harmonix. Harmonix created a Guitar Freaks clone and is now trying their hand at peripheral manufacturing, a Karaoke Revolution clone, a Drum Mania clone and the technical achievement of making all these peripherals work online without lag getting in the way. Rock Band is a new IP with a lot of corporate players involved, not to mention a massive technical undertaking -- it's all a big risk. Pachter put it quite simply, "Activision didn't buy the wrong company, MTV bought the wrong company."
Reader Comments (Page 1 of 1)
Rubang B @ Apr 14th 2007 5:34AM
Whoa, for ONCE I totally agree with this guy.
RT @ Apr 14th 2007 5:49AM
Wow. What a moron. Red Octane was a better purchasing choice than Harmonix? Please. There's so many things wrong with this article I don't even know where to start. A talented music-game developer is far more valuable in the long run than a hardware manufacturer banking on guitars peripherals. Harmonix has yet to put out any game that is less than terrific - even if the sales were. They've already made a huge name for themselves, and the more complex game of Rock Band is likely to blow Guitar Hero out of the water permanently once it debuts.
RT @ Apr 14th 2007 5:53AM
And I can't believe that people still think that Guitar Hero is a Guitar Freaks rip-off. The game is far closer in appearance and gameplay to FreQuency and Amplitude than Guitar Freaks. The only thing GH and GF have in common is that they're played with guitar peripherals.
ShaleX @ Apr 14th 2007 6:29AM
And BTW, Harmonix made Karaoke Revolution.
Otis Whitaker @ Apr 14th 2007 6:25AM
"a Karaoke Revolution clone"
Wtf? Harmonix MADE Karaoke Revolution. They're ALLOWED to copy something they themselves frigging made.
This guy is a god damned douche.
Sang @ Apr 14th 2007 4:14PM
Remember when this guy said there weren't 4 million people in the world who wanted to play online games or the part about how Xbox Live was a disaster because it had a community?
Yeah.
Lixie @ Apr 14th 2007 8:05AM
WTF! Some guy at Wedbush Morgan Securities knows about Guitar Freaks?
fox @ Apr 14th 2007 9:31AM
RT, you're looking at the situation from a gamer's perspective not a business perspective. Activision made the right choice in buying red octane because, quite frankly, your average consumer is not going to know Harmonix from any other developer out there. So they're not going to care whether or not Harmonix or Neversoft makes GHIII. All they're going to see is the "Guitar Hero" name on the box.
Hammertime! @ Apr 18th 2007 8:21AM
"So they're not going to care whether or not Harmonix or Neversoft makes GHIII. All they're going to see is the "Guitar Hero" name on the box."
They will notice craptaculism when you unlock Tony Hawk as a special guitarist, complete with skateboard guitar and Bob Burnquist roadies. How many Tony Hawks have we seen that are really great... Project 8 is back in form but THUG had us ollieing through sunroofs to watch a poorly animated stripper dance like a ungreased toy monkey. It was great that they also didn't insult our intelligence when it came to making the set list. Too easy is it to pick mainstream current rock bands, but to pick music that is probably obscure to most 15 to 22 year olds that is more significant in regards to all genres of rock and metal means Harmonix and the old Red Octane (since RO is the new Rareware) treat their subject matter with alot of care. Picking Psychobilly Freakout is a harder choice than say Fall Out Boy.
All the important Red Octane staff have left, people underestimate that Harmonix forte' IS rythum games (much as Blizzard is to RTS) and Activision is set to churn out Guitar Hero games every 6 months and to the lowest demominator possible. Look out for Guitar Hero: Pop Band coming soon, with Hillary Duff!
Nohbdy @ Apr 14th 2007 10:09AM
Uh, yeah, GH *did* rip off GF. All it did was add two frets, put things in that retarded hallway perspective, put in the most repetitive visuals ever, and not force wailing on you.
DD @ Apr 14th 2007 10:08AM
Just started playing GH2 on 360, and noticed there was an update for the game I had to download this morning. Anyone have details on the update? Maybe this attempts to resolve the "software" causing the guitar malfunctions?
Tacoman @ Apr 14th 2007 11:05AM
Someone finally came out and said Guitar Hero is a rip-off of Guitar Freaks. Good on him! And let's be fair: Guitar Freaks and Drum Mania already sync-up at the arcade, so you can have a guitarist, bass player, and drummer right there, so Rock Band has already been done as well. Not saying I won't buy them for Wii, they're fun games, but they're not original ideas.
I like Guitar Freaks a lot better because the arcade guitar is fantastic (really good weight to it) and it makes me feel like a rock star jamming out in the smokey, loud arcade.
I still don't see how they're going to emulate Drum Mania though, you'd need a full synth-drum setup.
Jinno @ Apr 14th 2007 11:08AM
"Uh, yeah, GH *did* rip off GF. All it did was add two frets, put things in that retarded hallway perspective, put in the most repetitive visuals ever, and not force wailing on you."
Okay, but lets look at the games Harmonix produced before GH. Frequency featured button timing for sounds, as did Amplitude, both of which featured the "retarded Hallway Perspective" as you put it, that really, are a better way of displaying things than how Benami does it in EVERY SINGLE GAME THEY MAKE! They added 2 Frets, indeed, because the gameplay was much more suited to behave a bit more like an actual guitar. They added a whammy bar and star power as well.
Totally a rip off.
And yes, this guy is a douche for saying that they'll be producing a rip-off of their own game.
Christopher7xii @ Apr 14th 2007 11:09AM
"Picking Psychobilly Freakout is a harder choice than say Fall Out Boy."
You're comparing a song to a band, FYI. If you would have said picking Reverend Horton Heat to Fall Out Boy, or Psychobilly Freakout to Dance, Dance... That'd be an equal comparison. Personally, I think you're just being a dick and assuming new music is all garbage, but 20 years from now it'll be the new More Than a Feeling, Smoke on the Water, or Bark at the Moon. A classic because that's what the kids grew up with when they were in high school. Step outside your box and realize that sometime?
As for Neversoft taking the reign... Think about it, if they are good at anything, it's polishing things up and reiterating it. That's all guitar hero needs. A new coat of paint, new tunes, and maybe some new features here and there. Rhythym games really don't make a whole lot of progress between versions, they just have different song tracks.
Eitherway, I think Neversoft will rock out Guitar Hero 3 pretty well. Activision made a smart move.
Now everyone will probably think I'm crazy, but Rock Band sounds like a horrible idea. I play GH because its a quick stint of entertainment. Rock Band sounds like you need to get involved, meet others, and create music. Honestly, if I was that interested in making music, i'd either learn a real instrument or learn Acid! or Frooty Loops. Personally I don't think it'll be possible with lag, but I guess we'll see. I predict a horrible failing though. Another reason, periphirals. Look at Final Fantasy Crystal Chronicles, Zelda: Four Swords, or Pac Man Vs. Awesome, innovative games. Their big downfall? Periphirals (a $10 cable and a GBA that most people already owned). People don't want to spend an extra hundred dollars on more stuff that they'll use for one game. Buying 4 controllers, 4 lithium ion batteries, and two guitars for the 360 is enough for me.
Maikeru @ Apr 14th 2007 11:20AM
"People don't want to spend an extra hundred dollars on more stuff that they'll use for one game. Buying 4 controllers, 4 lithium ion batteries, and two guitars for the 360 is enough for me."
Well, the thing is, Guitar Hero itself is an 80 dollar game, yet the second installment sold like hot-cakes in its full game-and-controller set form. There's a market for games like that now. It might not be as massive as Madden '08: Special Platinum Limited Fan Collector's Fingerbang Edition's, but it is there.
Those games you mentioned, by the way, didn't really fail because of the peripheral, I think. They failed because they were on a system that never really generated a lot of sales momentum after the first few months.
therpham @ Apr 14th 2007 11:19AM
If Guitar Hero isn't a takeoff on Guitar Freaks, In The Groove isn't a takeoff on Dance Dance Revolution. A hallway perspective and a slight tweak (extra buttons in GH, mines and rolls in ITG) a new game do not make.
It doesn't stop Guitar Hero from being fun, and ITG would have been fun if the songs hadn't been total crap. I'm just saying.
JimyD @ Apr 14th 2007 12:15PM
Pachter is a knucklehead. You can use his argument in reverse by stating that anyone can make the hardware but it takes a unique talent to develop the game. If it's my cash, I would take the developer every time.
Taco_Hell @ Apr 22nd 2007 11:30PM
@15
Actually, all of the games, aside from FF Crystal Chronicles, mentioned in that post were released in the GBA which did considerably well. The trouble with them was, people saw you needed to buy all this cables and whatnot to play the game which made people back-off.
Antonio @ Apr 14th 2007 1:11PM
Yeah this guy doesn't know shit. One big thing he failed to mention is the advantage MTV brings with record studios. Rock Band will hopefully feature master recordings and more of the popular songs, so if Metallica finally puts one of their songs in we get good stuff like "Enter Sandman" or "For whom the bell tolls" instead of some their later crap.
Werbal @ Apr 14th 2007 2:02PM
Actually, with MTV running the show I predict MORE new crap will make it to the game. MTV has all sorts of deals record companies to promote THEIR bands and THEIR songs.
Why would MTV put Metallica on the game? They don't play Metallica's music anymore, and there's more money to be made by signing deals with record labels to promote the newest, crappiest songs. I think ROCK BAND will be more Fallout Boy and Evanesence than it will Led Zeppelin or Black Sabbath.
Dr. John A. Vengeance @ Apr 14th 2007 2:28PM
One thing people are forgetting, however, is that yes, Harmonix did create the guts of Guitar Hero, but who did the music production, chord progression, and even some of the art and programming? Red Octane. There's no denying that Harmonix is a talented developer (I love Amplitude, and what little I played of Eyetoy Antigrav seemed fun too) but who was the smarter purchase here: the guys who made the basic guts of the game, or the guys who guts of the game (and a bunch of the Bonus Tracks), or the guys who made the Guitar controller, found the developer, did the music, and helped out with the art and programming?
Quite simply, if I were Activision, I would've taken Dusty Welch and Marcus Hendrickson over Harmonix any day.
Dr. John A. Vengeance @ Apr 14th 2007 2:31PM
Wow, I just noticed a glaring typo in that. Sorry, here's a readable version:
One thing people are forgetting, however, is that yes, Harmonix did create the guts of Guitar Hero, but who did the music production, chord progression, and even some of the art and programming? Red Octane. There's no denying that Harmonix is a talented developer (I love Amplitude, and what little I played of Eyetoy Antigrav seemed fun too) but who was the smarter purchase here: the guys who made the basic guts of the game (and a bunch of the Bonus Tracks), or the guys who made the Guitar controller, found the developer, did the music, and helped out with the art and programming?
Quite simply, if I were Activision, I would've taken Dusty Welch and Marcus Hendrickson over Harmonix any day.
s256 @ Apr 14th 2007 4:16PM
People who don't think Guitar Hero rips of Guitar Freaks just make me laugh. Harmonix is obviously full of Bemani fans - why else would they be ripping off DrumMania next?
Guitar Hero is GuitarFreaks plus two frets and a whammy and 3D visuals, minus an excellent scoring system and insane difficulty (check YouTube for Timepiece Phase II, Concertino in Blue, The Least 100 Sec).
BTW, I prefer the 2D view with videos (how Bemani designs their games) - it's a much better way of displaying the DIFFICULT songs.
Also, Harmonix does NOT have the rights to Karaoke Revolution, even though they created it. Konami is the publisher, so they own the name, at the very least. I don't know if they own the technology or the type of game.
Martez @ Apr 14th 2007 5:22PM
Not a smart choice for Activision- but good for gamers.
Abscissa @ Apr 14th 2007 6:14PM
If the Tony Hawk series is any indication, Neversoft's Guitar Hero will fall flat on its face from having the worst music-game song list since Donkey Konga.
And I still want to know who's decision it was to block the older TAC controllers in GH2: Harmonix, Red Octane or Activision (or MTV).
Sean Campbell @ Apr 14th 2007 6:51PM
Regardless of your views, its a well written article that is spurring some great debate.
I enjoyed it and the discussion enough to submit it over on Digg. Go add your diggs to it and get our pals at Joystiq a little press and hubbub.
http://www.digg.com/gaming_news/The_tricky_legal_landscape_of_Guitar_Hero_vs_Rock_Band
Megaqwerty @ Apr 14th 2007 10:48PM
SuperSession: three arcade machines, Drummania, Guitar Freaks, and Keyboardmania, all hook up with drummers, guitarists, and keyboardists. Sound somewhat familiar?
Guitar Freaks is vastly superior to GH in many, many regards, but GH has one aspect which more than compensates: shifting. Adding one fret would have done nothing, but adding two wholly changes the rules of the game. If they (either Konami, Harmonix, or Neversoft, I don't care who) adds another string, that would be awesome.
RedOctane made In The Groove, no? Granted, they just took a copy of Stepmania, and modded it extensively while adding new songs, but they do so on a professional level and created a product that was quite attractive. Considering that they now have the might of a brandname behind them, from a purely fiscal perspective, they would seem to be the far wiser choice, although Neversoft will probably massacre the set list (although many GH songs have appeared in THPS games...).
Conbus @ Apr 15th 2007 2:00AM
All I know (and care about) is that if my GH 2 guitar for the 360 isn't compatible with Rock Band, I'm gonna be pissed. And if it isn't compatible, then I see them selling less copies of that game.
Eggman @ Apr 15th 2007 2:41PM
For the record, no, Red Octane did NOT make In the Groove. Roxor made ITG. Red Octane merely did the publishing on the home version. Roxor was also sued by Konami for infringing on a bunch of their ideas AND using their arcade cabinets to host the game. Konami then bought out Roxor.
No one took a copy of Stepmania. They took Stepmania itself. In the Groove was made by the original Stepmania dev team and they just transplanted it into an arcade cabinet with a custom theme and some extras and then changed it to a hallway-style visual as default to avoid the copyright Konami has on any vertical playfields for dance games since it is otherwise identical.
Red Octane also did not have ANYTHING to do with the covers for Guitar Hero. Those would be handled by Wave Group, which is a few Konami in-house artists (Shoichiro Hirata being the major one) and a few others.
Brice @ Apr 16th 2007 4:49PM
Um who cares if Rock Band is copying all 3 of those games? This is in response to the posters here not the article (which is talking about the business aspects of copying all 3).
Sure you can play similar games in the arcade, but guess what? The arcade is dead. I waited years for Konami to port over some games, and all we ever got was DDR. Then Guitar Hero finally comes along and is exactly what I want. Yet while playing i've always wanted to play with more than just 2 people. When friends are over we all get bored because most of the time is just sitting around (since the songs are so long). Well now Harmonix has given me my wish and it's going to happen this year! I've got nothing to complain about.
Ndux @ Apr 16th 2007 4:08AM
Konami did not buy out Roxor. They acquired the intellectual rights of ITG therefore Roxor is not allowed to pursue the game anymore.
At least someone in the gaming news knows what game ripped of who, aka beatmania ripped off GH. I'm glad that GH came around and people are starting to look into GF, DM, KBM, Pop'n, and IIDX. It brought the japanese games to many of the people who loved to play it, and researched guitar games.
sheppy @ Apr 16th 2007 9:55AM
Okay, this must be said. I've been a Harmonix fan since The Axe. I'm one of the few who know why Freezepop shows up in almost every game. Simply put, I'm a Harmonix fanboy. So if people want to attack my position, there it is... right there. Fire away at the easiest point.
When Guitar Hero was announced, I was among the first to denounce it as a Guitar Freaks ripoff. This coming from a guy who has to travel 2 1/2 hours to an arcade which fetaures a machine so I only play when I travel to concerts. Somewhere along the lines, I kept waiting for Konami's announcement. I'm a huge Benami fan and sadly, Konami has been repeatedly kicking me in the dick for years with DDR being the only series to officially make it stateside. Coming soon, though, was Beatmania and a glimmer of hope for my weary soul. Until I played it. The only good thing about the US Beatmania drop was the fact that I didn't have to spend $100 importing a controller now.
So yeah, Konami blazed the path in many respects and Harmonix merely copied on GH (on a very basic level of "who copied who" bullshit games that only seem to matter to fantards and people quite eager to limit the expansion of a genre just because "they totally ripped off"). In fact, in Guitar Hero, Harmonix was taking a step backwards. They went from a developer all about music creation to music mimmicking.
But wait, with Guitar Hero making a buzz, certainly Konami is set to move, right? After all, if anyone could push peripheral based games, it's a company that HAS games established in the genre. Let's put it this way. Guitar Freaks has been around since 1998. It was released in very limited numbers in the US with a 13 song playlist. Beatmania has been around 1997 and only had one halfassed localization and only recently was Beatmania 14th tested in a local arcade (as in tested by Konami). Drummania has been established in 1999. And where are these games?
Certainly if we're bitching and ranting about how X game is such a ripoff of X game, they must be readily available. Before the Guitar Hero ripped off Guitar Freaks excuse can be mustered, I should be able to walk into any Best Buy and be able to purchase a copy. But that's not the truth of the matter. Fact is, Guitar Hero was a path blazer in the simple fact that it not only took the chance on peripheral based gameplay, but threw significant muscle behind it. Only now, after Harmonix had established peripheral based games as a viable presence in the market has other companies, including the trail blazer Konami (and truth be told, I had guitar training software in 1995 that you hooked your amp up to the computer and you played along with the samples trying to match the tones so...), finally looked at the genre seriously.
So we can sit her all day talking about who ripped off who. But at the end of the day, where the fuck was Konami on this? Why WAS the ripoff game the first one to take the chance? Why are the only Beatmania machines in arcades, outside of DDR, imported and not officially backed by efforts from Konami? If the industry was still waiting for Konami to make their move, we'd be well into PS4 before we finally saw Guitar Freaks.
judge fenious @ May 16th 2007 6:20PM
Guitar freaks is the ONLY arcade game I ever put money in and walked away from before my game was over. It is crap crap crap...I wouldn't go as far as saying that guitar hero is a rip off of guitar freaks, I think it is better spoken to say someone had an idea similar to "Hey...what if Guitar Freaks was a "playable" game, or even fun!!!..."