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Viacom: Rock Band sales improving, "though not as quickly as we'd like"

By Matt Martin

Wed 04 Nov 2009 9:03am GMT / 4:03am EST / 1:03am PST

Company promises more marketing dollars, but cautious of crucial Christmas period; franchise to break even in Q4

Harmonix and MTV Games owner Viacom has said sales of the Rock Band franchise are improving - though not at a pace that meets expectations.

Rock Band hit margins at the company's Media Networks group during its third quarter ended September, although Viacom said that it expects the franchise to finally break even or become "slightly profitable" in Q4 if sales are good through Christmas.

"The economics of our Rock Band franchise are improving, though not as quickly as we'd like," admitted Philippe Daumann, CEO of Viacom in a conference call to investors.

The next two months will be crucial for The Beatles: Rock Band in particular, said Viacom, as the company prepares to to pump more marketing dollars into the game during the busy Christmas sales period.

"We had a great launch of The Beatles product," said Daumann, but "obviously at this time of year we await the holiday season to begin as the month of November unfolds. We will start putting in more marketing dollars together with our retail partners behind that product."

"We just have to be cautious given that we are entering, over the next several weeks, a retail season that will depend on how consumers spend their money generally. So we have to be cautious about how it is unfolding. Meanwhile we continue to manage that business with a close eye on inventory levels and with a greater focus on software."

Industry watchers are split on the future of the music genre, with high-price entry points due to bundled hardware meaning most games become profitable at a slower rate than normal videogames.

Poor sales of Rock Band and rival Guitar Hero games were blamed for a lacklustre retail performance during September in the US, and the latest DJ Hero title from Activision released last week debuted in the UK charts at 20, after pre-order sales failed to meet expectations.

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