Did The Record Labels Kill The Golden Goose In Music Video Games?

from the of-course-they-did... dept

For the last decade or so, every year the major record labels seem to bet on some single "magic bullet" to fix all that ails them. They go through phases. There was their own crappy DRM'd and locked-down music stores. There were ringtones. And... there were music video games like Guitar Hero and Rockband. And, of course, as soon as those games actually started helping the recording industry, the industry decided to suck them dry. Edgar Bronfman kicked it off by declaring angrily that those games had to pay much more to license the music -- even though the music in those games tended to lead to much greater sales of albums for those artists.

And now it looks like the labels may have succeeded in bleeding those types of games dry. With Activision announcing that it was dumping Guitar Hero, one of the major reasons given is the high cost of licensing music. Yup, the labels priced things so high that they made it impractical to actually offer any more. Yet another case of the labels overvaluing their own content. Now, it's also true that these games haven't evolved that much, and people haven't seen the point of buying new versions, but part of that lack of evolving is because so much of the budget had to go towards overpaying for music, rather than innovating.

Filed Under: guitar hero, music, video games
Companies: activision


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  1. identicon
    Anonymous Coward, 10 Feb 2011 @ 8:59am

    Re: Re:

    The high cost of licensing is relative to a shrinking market and shrinking margins on the product.

    Activision had no problem signing up and paying the fees when the market was good. The fees haven't changed, the market did. Blame the high cost of raw materials is cherry picking. Perhaps you want to read an unbiased version of the story:

    http://games.on.net/article/11570/UPDATED_Activision_Financials_Released_Guitar_Hero_disba nded_Diablo_III_Delayed

    Guitar Hero and True Crime are the first two major franchises to feel the bite due to lacklustre sales and less than promising development respectively

    Lackluster sales.

    The flagship Guitar Hero franchise has been struggling in what CEO Bobby Kotick calls a "declining" music game genre

    Declining genre.

    Perhaps you could read their actual press release:

    http://investor.activision.com/releasedetail.cfm?ReleaseID=548900

    At the same time, due to continued declines in the music genre, the company will disband Activision Publishing's Guitar Hero business unit and discontinue development on its Guitar Hero game for 2011. The company also will stop development on True Crime: Hong Kong™. These decisions are based on the desire to focus on the greatest opportunities that the company currently has to create the world's best interactive entertainment experiences.

    In a sampling of about 20 different stories plucked from Google news results, I couldn't find a single story that directly quoted anyone about the licensing costs. The Wired story very specifically doesn't use quotes. Yet the direct quotes from their own statements don't address licensing. In each case, they cite a declining market place.

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