Viacom: The Beatles: Rock Band sales strong, overall RB growth slow
by David Hinkle 
{ Nov 4th 2009 at 8:29PM } 
Despite tanking sales, the music genre still remains one of the best in the industry and The Beatles: Rock Band shows us that the right approach could still determine financial success in the space. Its September debut was very fortuitous and it even managed to best Guitar Hero 5 in the US -- which not only came with a free game, but is also one of the most recognizable brands to the mainstream.
Source - USA Today
Source - Viacom earnings report
Reader Comments (Page 1 of 1)
Giroro @ Nov 4th 2009 8:32PM
Slow and steady wins the race.
Special Agent Steve @ Nov 4th 2009 8:35PM
Unless you die before you reach the finish line.
But that doesn't happen to the Beatles.
Crayfish @ Nov 4th 2009 8:37PM
Wait, RB isn't even profitable?
Okay, that blows my mind.
bongoes Sector 2814 @ Nov 4th 2009 8:49PM
Yeah, I thought the DLC sold good. Do they not make profit off of that?
The Baron @ Nov 4th 2009 8:52PM
I bet thousands upon thousands of instruments being sold at a loss by retailers probably doesn't help.
Strike Man @ Nov 4th 2009 9:41PM
"Wait, RB isn't even profitable?
Okay, that blows my mind."
The statement is made within the context of what Viacom/MTV spent to purchase Harmonix.
Viacom spent around $175 million to pick up Harmonix, and has since paid over some $300 million in bonuses to its founders.
Rock Band is QUITE successful, especially when you factor in DLC, but it hasn't quite been half a billion dollars successful. At least not yet.
oolz @ Nov 4th 2009 9:42PM
Considering that the bulk of the article is about RB:Beatles, I'd assume that is what he actually means, not the franchise as a whole (rb1/2/beatles/mobile/etc). THey paid The Beatles a HUGE sum of money for the rights to their music/likenesses. Far more than the other games cost for licensing combined. It's impossible that they haven't broken even on those.
50 mil to The beatles + advertising + dev costs. They're right at 1.2 mil units sold. If you count all those as disc only sales that puts them right at 75 mil. Good 4th qtr sounds about right for them to break even on that investment. No way the original games haven't turned a profit by now though.
Woz @ Nov 4th 2009 9:55PM
I'm curious if they will ever reveal what the average people have spent on DLC. I know I'm over $150 spent on DLC and I'm certain there's many of you who have spent more.
Mr. Bungo @ Nov 4th 2009 10:07PM
As stated by Strike Man, the costs in acquiring Harmonix, and the bonuses paid to them after RB1's strong sales go a long way to offsetting profits. There were also massive costs involved with the R&D and manufacture of instruments, including the first drum set. They didn't have Red Octane's production expertise, and it showed with a lot of early instruments having problems. This in turn led to a generous (and expensive) return policy.
The Beatles Rock Band may be selling well, but I think Viacom was hoping for a much bigger hit, based on the enduring popularity of the band. The royalties paid to Apple Corps must be huge. Factor in the expense of archival restoration and separation of very old recordings, plus the design of various "dreamscapes" for a lot of the songs, and the money mounts up. Harmonix has gone on record that future DLC for the Beatles game is entirely dependent on the sales of these first albums and songs. They just cost so much to make compared to standard Rock Band DLC that profitability depends the tracks on selling very well.
I love Rock Band, both standard and Beatles variety. I'm even curious about the Lego version, even if only as a new song pack. So I really want the brand to live on. I think Harmonix has done something amazing in their approach to interactive music. Given the amount of money I've spent on DLC over the past couple years, I assumed they were raking in the dough. But as the rhythm game popularity seemed to crest, and stories like this one started popping up, it made grim sense. They may well be raking in the dough, but they just might not be raking in enough.
Linkb8s (XBL: Tenku no Link) @ Nov 5th 2009 12:30AM
Mr. Bungo hit a key point as to why profits may not be exactly what Viacom had been expecting, but I'm pretty sure there are other aspects that go into it as well, and they falls under the DLC catagory.
While DLC sales have been, for the most part, better than I believe most people expected, they still come at a cost. The licensing fees probably play a big role, and the bigger the hit, the more money Harmonix has to shell out to secure the rights. That in turn means you have to sell far more copies of "Don't Stop Believing" by Journey to make a profit than say "Knight on the Town" by Kula Shaker.
I'm pretty sure some people wonder why Harmonix just doesn't go for all the top tracks by the heavy hitters and that above point is probably part of the reason. What it takes to get return on their investment followed by profit requires a lot more from your fanbase than lesser name acts, so what may seem like a sure bet could in reality be a huge gamble based off of how much the licensing fees are for specific tracks.
But the above theory comes into question since we don't exactly know what Harmonix spends in acquiring the rights for each song and what the returns are per each DLC sale (How much goes to HMX, the Labels, and even the bands themselves).
VaultICEE @ Nov 4th 2009 8:39PM
I doubt Lego Rock Band is going to help sales... they've done shit to promote it. Band Hero's getting all the attention (which is typical of a Guitar Hero game)
Also, Lego Rock Band? Pretty good, great for a family. Some of the songs are pretty god-awful but others are really fun. Buy it if not for the export alone.
GewurztraminerX @ Nov 5th 2009 12:04AM
done and done
jayeffaar @ Nov 5th 2009 12:40AM
Band Hero is getting attention? Where?
Young_Nastyman @ Nov 5th 2009 12:43AM
Lego Rock Band is great, yeah some of the songs bite, but the game features all the humor of past lego games and harmonix-esque facts about the lego universe as a whole.
Plus Legofied Queen = pure win
WINterfang ( Now with the power to piss you off ) @ Nov 4th 2009 8:40PM
I recommend to Get Guitar Hero 5 instead.
Bobby Kotick 2: Echoes @ Nov 4th 2009 8:41PM
Fuck that! The Beatles Rock Band is far better than that piece of shit!
Special Agent Steve @ Nov 4th 2009 8:52PM
Lolz. It's opposite day..... or is it.... not? (Not... NOT o.0?)
Giroro @ Nov 4th 2009 8:54PM
I absolutely hate the Beatles, but I would still buy Beatles RB over GH5 any day of the week. Screw Activision.
KingOfHearts @ Nov 4th 2009 9:14PM
Wow, WINter, you do have the power to piss us off.
The only thing Guitar Hero has going for it is it's finger-bleeding difficulty. Roc Band is better. I rest my case.
oolz @ Nov 4th 2009 9:35PM
considering that the beatles has sold as well as Guitar Hero 5, I'd say not many people agree with you. The power of the guitar hero brand is all but gone.
Mazrael @ Nov 4th 2009 10:56PM
Isn't part of GH adding extra notes that aren't even in the song? because that's pretty pathetic, as far as I know RB just does what's in the actual song..
I take RB over GH anyday
fatherb @ Nov 4th 2009 9:00PM
My gf got me the Beatles Rock Band LE for my b-day and I went out and bought RB 1 & 2 because of it. So I believe in my case which may be the case in others is boosting RB sales. I think others that get this game first wil go back and get at least RB 2 for obvious reasons but unlike me will probably just rent RB 1 for the song transfer not purchase it. As for Lego RB it really doesn't appeal to me but I am not a child or have any so I do not know which would be more appealing to that audience Lego RB or Band hero. But to conclude I do believe over time Beatles will open up the doors to the older Rock Band titles to new comers in the genre. I waited initially to decide which branch to chose GH or RB as to which game would have Beatles or Pink Floyd on them but always was hoping RB would get it and am happy they did.
bobartig @ Nov 5th 2009 12:26AM
It may sway your decision, if you haven't heard yet, that Lego RockBand can transfer its songs into RockBand 2, just like RockBand 1, meaning that your RockBand 2 music ecosystem will be around 150 songs from those three titles together.
Johnathan @ Nov 4th 2009 9:11PM
"one of the" best? Rock : other music :: champagne : colt 45
Fane [Grammar Police - Power Of Pedantry] @ Nov 6th 2009 1:52PM
But Colt .45 works every time. Every Time!
Can champagne make that claim, even with chocalate-covered strawberries?
TRON.dll @ Nov 4th 2009 9:22PM
Franchise death in 3... 2... 1...
Phil @ Nov 4th 2009 9:25PM
I got into RB a bit late only picking up 2 when the price dropped to 99 for the band kit. I got Beatles at launch and i just picked up RB1 for 10 new from Newegg.
So far I've spent about half the cost of my PS3 on Rockband games and peripherals, and I'm still not done! I need another guitar.
I gotta say that I don't get how they couldn't be profitable unless they are getting raped by royalties.
John Master Lee @ Nov 4th 2009 9:57PM
I wrote up a piece covering the economics of Rock Band. Viacom is referring to the overall Rock Band series and how it's been a challenge trying to get it to profitability. They likely will be profitable by 2010, but so far, considering they generated over a billion dollars in retail sales, they still haven't made money yet.
http://tiny.cc/4yiKy
oolz @ Nov 4th 2009 9:58PM
It's impossible that the franchise as a whole hasn't generated a profit. I think his comments are misquoted or misinterpreted. They've had 7+ mil in sales for the original two titles alone. Even if you count those as disc only sales, that's a lot of money on games that, realistically, probably don't have astronomical dev costs. Most of the cost is licensing. The Beatles cost them 50mil for music rights alone. I would say that easily more than the first two games combined and probably more than all that plus all the DLC. I think they said they were putting 50mil into advertising for the Beatles and considering how little advertising there was for the first two games, it's safe to assume that also dwarfs the other games combined. Factor in all the track packs, which are just pressing DLC onto a disc and now all the mobile versions, which are just ports. They would have shut that shit down by now otherwise.
Linkb8s (XBL: Tenku no Link) @ Nov 5th 2009 12:29AM
Mr. Bungo hit a key point as to why profits may not be exactly what Viacom had been expecting, but I'm pretty sure there are other aspects that go into it as well, and they falls under the DLC catagory.
While DLC sales have been, for the most part, better than I believe most people expected, they still come at a cost. The licensing fees probably play a big role, and the bigger the hit, the more money Harmonix has to shell out to secure the rights. That in turn means you have to sell far more copies of "Don't Stop Believing" by Journey to make a profit than say "Knight on the Town" by Kula Shaker.
I'm pretty sure some people wonder why Harmonix just doesn't go for all the top tracks by the heavy hitters and that above point is probably part of the reason. What it takes to get return on their investment followed by profit requires a lot more from your fanbase than lesser name acts, so what may seem like a sure bet could in reality be a huge gamble based off of how much the licensing fees are for specific tracks.
But the above theory comes into question since we don't exactly know what Harmonix spends in acquiring the rights for each song and what the returns are per each DLC sale (How much goes to HMX, the Labels, and even the bands themselves).
Linkb8s (XBL: Tenku no Link) @ Nov 5th 2009 12:30AM
Stupid comment system, for a reply to Crayfish's comment strand.
Billybet @ Nov 5th 2009 2:07AM
They need to slow down with these games before they kill the genre completely. I mean seriously, how many GH and RB games were released in the last 3 years? They're over-saturating the market.
Nda @ Nov 5th 2009 5:13AM
If EA/HMX would put more effort into the european market or anything besides US they'd be doing better.
- We got Rockband like what? A year later?
- We get Beatles DLC a week later.
- EU Beatles servers are down for a week now with no response from HMX.
If you constantly keep screwing your overseas stuff up, no wonder you'll never win over those Guitar Hero fans. Rockband is so much less popular here in the Netherlands.