Remember we mentioned that Viacom had decided to sell off Harmonix as it wasn’t making enough money in their eyes? Well Electronic Arts Inc. Chief Executive Officer John Riccitiello told Bloomberg that his company, which distributes the game for Harmonix, will not be buying them out. Not until the asking price is 5%-10% of what it is now.
“There is going to be a time when perception catches up with the facts,” he said.
While buying the Rock Band music video game franchise could make “theoretical” sense, it’s not the strategic direction his company is moving in, he said
“We’re still out of favor,” he said. “Moves that look like I’m doubling down on yesterday would make it harder still to convince investors that tomorrow is the Promised Land.”
Electronic Arts distributes Rock Band, which is made by Viacom Inc.’s Harmonix studio. Viacom said earlier this month that it plans to sell the unprofitable unit.
“I’m sure some smart investor will buy the business feeling that they can catch a falling knife,” he said, “but more people have been cut trying to catch falling knives than have benefitted from getting the timing exactly right.”
The reason that Rock Band and Guitar Hero have not been as profitable as expected is Instrument sales. The execs expect us to buy new plastic instruments with every software purchase. So they projected X dollars in profit based on instrument sales, and only got Y because people only bought the software. I love Rock Band and I didn’t rebuy my instruments for RB3. I only got the keyboard. Who ever buys Harmonix simply has to realize this. Make all your profit predictions on software and DLC sales, not on the instruments. We already have them, we aren’t going to buy new ones till the old ones break.
Share this post: