"Several potential buyers" interested in quick Harmonix sale

Developer made a loss of $65m in last quarter; Viacom admits 'we don't have scale or expertise for games'

Media giant Viacom has admitted that it has been unable to successfully break the videogames market, and it's this lack of diversification that has led to the sale of Rock Band developer Harmonix.

The company said today it is preparing to sell the games maker, and that there has already been interest from several buyers.

"Our decision to exit this business reflect our strategy of focusing entirely on what we do best - make great branded entertainment content and deliver it through a variety of platforms," said Thomas Dooley, COO of Viacom in a call to investors.

"Harmonix has and will continue to create terrific videogames but for us it is about focus.

"The console games business requires an expertise and scale that we don't have. We have taken steps to sell Harmonix and we are in discussions with several potential buyers."

As well as plans to sell Harmonix "expeditiously", Dooley revealed that Harmonix suffered a loss of $65 million in the last quarter, but at least half of that was due to Viacom pursuing a potential sale.

"The third parties have a different economic view of Harmonix and we believe that it's an asset that will be worth more to them than it is to us," he said.

Viacom bought Harmonix four years ago for $175 million, but sales of its games have never met expectations at the company. The corporation has even tried to claw back bonuses paid to the developer's top staff.

Viacom's most ambitious Harmonix project was The Beatles: Rock Band, which reportedly cost the media firm $50 million in licensing fees for the Fab Four's back catalogue, although sales were only modest.

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Latest comments (6)

Shane Sweeney Academic 11 years ago
ZeniMax Media hahaha
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Brett Walton MD, VGChartz Ltd11 years ago
Don't like being the bearer of bad news, but with the music industry really in the doldrums right now it is going to be harder and harder for companies like Harmonix to turn a decent profit.
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Matt Martin Editor, GamesIndustry.biz11 years ago
I think Harmonix would be a great purchase for a company that understands games. Viacom didn't. I'm sure Ubisoft is watching.
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Steve Lee Designer, People Can Fly11 years ago
@Brett Eh? The main reason the music industry is in decline is because of piracy, and one big thing that Harmonix have in their favour is that key parts of their games and profit - the peripherals - can't be pirated. You say the music industry is "in the doldrums" as if it's because people don't enjoy music anymore or something.
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Arwed-Ralf Grenzbach 11 years ago
Harmonix is a great target for any major that understands to incorporate extremely talented people to drive a new cross-platform strategy on existing and new IPs. The key challenge for Viacom will be to recoup their investement into Harmonix. The pricetag a big player would put on the table will be less what Viacom is expecting. .....Wait and see ..
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Jamie Leece SVP Business Development, Behaviour11 years ago
"Several potential buyers" interested in quick Harmonix sale - Define Quick? The unfortunate reality is that no one makes money on the plastic (peripherals) and you can see Viacom licensing to MadCatz as a signal towards getting away from the risky parts of the biz. There is money to made in the downloads (more tracks) but that requires software sales. There may be something here of value, the question is going to be whether or not the run rate of the company can be supported by the upside. Arwed made a good point about the talent of Harmonix, that can not be denied. The value going forward will be based on what they can pull off in addition to what they have done in the past and given the turmoil, why wouldn't the founders just decide to wait it out and start up a new thing and retain all the value.
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