Rock Band abandoning hardware, Guitar Hero focusing on new audiences

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A screenshot from The Beatles: Rock Band. Credit: MTV Games.

The music video game genre has been in a profound slump this year, with sales down 46% so far, according to the NPD Group.

Part of that is due to the recession, of course, but part of it may be waning consumer interest in Guitar Hero and Rock Band. The games’ publishers, Activision Blizzard and MTV Networks (owned by Viacom) have seen the impact on their bottom lines and are taking big steps to shake up their businesses as a result.

As a story in today’s Times explains, the biggest change comes in the form of The Beatles: Rock Band, a risky bet worth tens of millions of dollars in royalties alone.

But as MTV launches the game with its distribution partner, it’s also implementing a new strategy: Flee the hardware business. Sure, there’s a limited-edition, $250 hardware package, but quantities are limited. And there’s a $160 ‘value bundle’ featuring original Rock Band hardware that MTV is eager to get rid of.

If you’re new to music video games and want controllers for The Beatles: Rock Band, MTV has a preferred solution: Buy Guitar Hero.

“The opportunities around hardware are really limited,” said Scott Guthrie, general manager of MTV Games. “We are getting into a focus on software and [downloadable song] revenue streams.”

MTV Games senior vice president of electronic games and music Paul DeGooyer puts it even more abruptly: “Let others take on the burden of getting those super-tight margin instruments out there.’

The ‘others,’ of course, is really one company, Activision Blizzard. And its CEO Bobby Kotick admits it’s time for a change as well.

‘We did a very poor job of marketing from January until now,’ he told the Times bluntly, giving the clearest indication yet of why he brought in former Yahoo chief operating officer Dan Rosensweig to run the company’s Guitar Hero division in March.

The other problem in Kotick’s mind? Too much classic rock.

‘Over the course of the last seven or eight months, we didn’t do anything different,’ he said ‘There was more classic rock, confusing marketing, and some product shortages in December. Then the recession came, along with the high price points of our hardware, and we were not well marketed or merchandised.’

Guitar Hero 5 brings even more classic rock, but Kotick hopes it will stand out as a value, offering 85 songs plus a free copy of December’s Guitar Hero Van Halen for the same cost as 45 songs on The Beatles: Rock Band.

Also coming this fall from Activision are DJ Hero and Band Hero. Kotick seems particularly excited about the latter, with its slew of chart-topping artists from a variety of genres such as Taylor Swift, the Jackson 5 and No Doubt. Most importantly to Kotick: They’re all family friendly.

‘It’s the first E-rated game in this category anybody has ever done,’ he bragged. ‘The packaging, the interface, the design, the features -- everything is oriented toward that consumer who doesn’t play video games.’

For more on the business of The Beatles: Rock Band and how the music video game genre is shaping up for the fall, read the story in today’s Times.

-- Ben Fritz