Rock Games Singing Sad Songs, Waltzes

Profit Warnings and a Slowdown Without Much Signs of Letting Up

Posted by Mke Tunnicliffe on 12.13.08 @ 05:20 PM

Note: The lede for this post has been altered slightly to provide better context for the story.

While the rest of the video game industry seems to be prospering despite the tough economy, two rock-branded game franchises that once promised to broaden the market have unexpectedly fallen behind their competition. Is the tour winding down for "Rock Band" and "Guitar Hero" ?

Electronic Arts, the video game publisher behind the "Rock Band" franchise, has issued its second profit warning within as many months, and, according to numerous reports over the last few days, including one from the BBC, a number of holiday season titles -- including the second installment of the "Rock Band" series -- have seen disappointing sales figures since their releases. The company also said it had been hit by the growing market share of Nintendo's Wii console, which experienced unexpected growth in November and features a bevy of successful first-party software titles. That said, even Nintendo's music game offering, "Wii Music," has thus far been an unexpected failure.

Over at Activision, the company behind "Guitar Hero," analysts are starting to predict a slowdown in revenues, with Wedbush Morgan analyst Michael Pachter telling Wired that we can expect to see an overall Activision revenue drop of 14 percent. Jesse Divnich of Electronic Entertainment Design and Research issued a research note on Monday that stated "Guitar Hero" should expect unit sales to decline by at least half, series-over-series for November. In October, this figure was at 60 percent.

However, the same report also acknowledged that, although sales are going to be down, games like "Guitar Hero" and "Rock Band" will not be disappearing "anytime soon." Thanks goodness for that as I'd hate to see those Hedi Klum commercials disappearing off our screens!

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Mike Tunnicliffe owns Tuna Music LLC, a New York- and London-based management company. Find out more at miketunnicliffe.com.