Beatles not putting Viacom's Rock Band in the black

It may be a long and winding road to profitability for The Beatles: Rock Band.

On a conference call with analysts today following its quarterly earnings report, Viacom executives said that their Rock Band video game franchise, whose only new product last quarter was the Beatles version, is losing money, as it has for the past two years.

"Rock Band was a negative contributor to margins in the third quarter," said Chief Financial Officer Tom Dooley. "We expect it to break even or be slightly profitable in the fourth quarter from a margin point of view. It really depends on how many units we sell in the holiday season."

Losses on Rock Band brought down the operating margin of Viacom's media networks group, which encompasses its cable channels and related products, from 40% to 36%.

Chief executive Philippe Daumann said that Beatles: Rock Band had a "great launch" but also noted that "the economics of our Rock Band franchise are improving, though not as quickly as we'd like."

The game sold 595,000 units during September in the U.S. International sales data hasn't been released, and Viacom didn't provide any specific updates today.

In the past, Rock Band games have lost money for Viacom primarily because of the high cost of manufacturing instrument controllers. For the Beatles game, the company significantly raised the price of a version with instruments and encouraged consumers to buy the software, which is more profitable, and play it with older Rock Band controllers or those from Activision's competing Guitar Hero titles.

-- Ben Fritz

Photo: The Beatles: Rock Band on sale at a Best Buy in New York City. Credit: Daniel Acker/Bloomberg.

Comments

[Nathan]

As an avid Rock Band player and one who prefers Rock Band to competing products, I can tell you and your readers that my interest in The Beatles: Rock Band plummeted when I learned that there would be no cross-compatibility between it and Rock Band 2. Rock Band 2 is brilliant in that you can import most of Rock Band 1 and all of the track packs, not to mention the huge library. I would consider purchasing TB:RB (as we abbreviate it) if I could export the songs from it, or play all the music on my Xbox 360 with it. I don't care if the Beatles characters are only enabled for Beatles songs; use the generic ones instead for non-Beatles songs (I prefer Ol' Smokey, he's an old guy like me, though he's got a few years on me). And I'd like to be able to play Beatles songs in playlists with other bands. A one-band game won't really appeal to me -- unless the band is Nightwish, but an American company isn't going to take that risk. Maybe if Nokia or another Finnish tech company were making the game, but that makes even less sense.

[dds]

I'm not at all surprised. I am a huge fan of RB, putting in hundreds of hours of play and I am nothing but disappointed with RB: The Beatles.

I hope Harmonix learns the lesson from this-- you already have a fractured userbase with Guitar Hero vs. Rock Band, and what do you do? You create a third property (The Beatles) with no ability to transfer songs between your existing properties.

More importantly, The Beatles is boring. 45 songs and a career mode that my Wife and I finished in 4 hours. Really? I'm sorry Harmonix, I love what you've done with RB1 and RB2, but with DJ Hero now here and Activision Blizzard learning from their mistakes on Guitar Hero: World Tour, you guys better get your act together.

[Universe]

I love the RB series and have downloaded going on 400 plus songs. I really wanted to buy this game but it does not support any of my DLC. Nor can I import any of the tracks to other RB games.

I believe this is one of the primary reasons it has not sold as many as expected.

Open it up to play DLC or to import the tracks and you would have a monster seller!

[Tim Shirk]

I am a huge supporter of the Rock Band franchise and love and value the ability to amass a giant library of songs via transportable tracks.

That said I also love the Beatles, bought and owned The Beatles Rock Band and love it! These days if I sit down to a session of music gaming, it's TB:RB I pull out and croon or jam out a setlist of these endless gems. 45 amazing songs and still haven't hit the bottom.

If you are sitting here complaining that the experience of the TB:RB isn't worth its own game you are not much of a Beatles fan or you are an overwhelming miser.

If you are complaining that you can't reuse the songs in RB2 consider that it is the first Beatles songs in ANY DIGITAL FORMAT (aside from CD's) and count yourself lucky they pried that much out of Apple.

TB:RB is a major coup and the lack of transferable tracks is a minor, minor quibble. I've said this before, TB:RB should be compared Apples to Apples and put up against GH:Van Halen or Metallica, not something like RB2 or GH5.

[Kyle Tanner]

"If you are sitting here complaining that the experience of the TB:RB isn't worth its own game you are not much of a Beatles fan or you are an overwhelming miser."

Actually, Tim. I am both.

I hate RB and I am so glad to hear they are failing. They forced RB to make drums and whatnot, and any bad news for Rock Band is great news for me.