Viacom to sell Harmonix
Rock Band developer offloaded; speculation begins that Activision could swoop for studio
Harmonix parent Viacom has announced that it will be selling the Rock Band developer, in the same financial statement which revealed that write-downs at the developer had helped to slash 59 per cent from Viacom's third-quarter earnings.
No buyer has come forward for the developer as yet, nor was any reason given, but discontinuation of the company's revenue streams and a re-evaluation of its market worth has cost Viacom $299 million.
Doug Creutz, of market analysis firm Cowen & Company, has speculated that it would make sense for Activision to buy Harmonix, reuniting it with the Guitar Hero brand.
"We speculated several weeks ago that, given the declines in the music genre, it would make sense to (re)combine the Guitar Hero and Rock Band franchises, thus we believe Activision Blizzard is a potential buyer," said Creutz in an email.
Generally, it was a healthy financial report for the MTV owner, with overall revenues up to $3.3 billion for the quarter ending September 30, compared to $3.17 billion for the same period a year earlier.
Nine month earnings and revenue also increased across the board, buoyed by healthy ad revenues from TV channels and strong performances from the company's cinematic releases, such as Jackass 3D.
"We are very pleased with the financial and operational results we delivered in fiscal 2010, which were the direct result of our continuing creative success. With a strong balance sheet and increasing free cash flow, we are delivering on our commitment to return capital to our shareholders with the institution of a quarterly cash dividend in the second quarter followed by the resumption of our stock repurchase program in October," said Viacom president and CEO Philippe Dauman.
Rock Band 3, the latest iteration of the music game franchise, was extremely well received critically, but failed to make any impression on the sales charts - selling only 7386 units in the UK on its week of release.
Harmonix also developed Kinect exclusive Dance Central, which released last week in the US and this week in Europe. No indication has been given as to who will offer continued support for the titles, nor what form it will take.
MTV, which is also owned by Viacom, purchased Harmonix for $175 million in 2006.
Slow sales of the Rock Band games had previously been highlighted as an important factor in financial downturn at Viacom, but more recent reports seemed to indicate that the tide was turning in Rock Band's favour.