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The Beatles: Rock Band has a solid debut

October 20, 2009|Ben Fritz and Alex Pham

It wasn't the equivalent of selling out Shea Stadium, but the Beatles had a decent debut in the video game world.

The Beatles: Rock Band, Viacom Inc.'s heavily hyped and costly video game based on the music of the biggest-selling rock band of all time, sold 595,000 units in its first 25 days for sale in the U.S. last month, according to NPD Group.

That's bigger than the first-month sales of either 2007's Rock Band or 2008's Rock Band 2, but far below the best launches in the music-video-game genre and some analysts' estimates.

The solid but far from stellar start for the Beatles video game came as the overall business continues to struggle. Despite the release of several high-profile titles, video game industry revenue rose less than 1% to $1.28 billion for the month of September.

The month's top-selling game was Halo 3: ODST, the latest entry in Microsoft Corp.'s bestselling series, which sold more than 1.5 million units. Also selling well were Nintendo Co.'s Wii Sports Resort and Electronic Arts Inc.'s Madden NFL 10, which is still lagging behind last year's entry in the annual football series but gaining ground after a weak start in August.

Among consoles, Sony Corp.'s PlayStation 3 beat Nintendo's Wii and Microsoft's Xbox 360 for the first time since its launch in 2006 thanks to a $100 price cut.

Guitar Hero 5, the latest installment of the music series that has historically outsold Rock Band, came in behind the Beatles game last month, selling 499,000 units, even though publisher Activision Blizzard Inc. offered a free copy of Guitar Hero: Van Halen in an attempt to boost interest.

The Beatles: Rock Band was the No. 3 release in unit sales and No. 2 in revenue for September. The game generated $60 million worth of sales, according to two people with access to NPD data. NPD does not release sales volume data, and it did not respond to a request for comment.

The launch "was exactly as we had hoped and planned for," said Scott Guthrie, executive vice president of Beatles: Rock Band publisher MTV Games, which is owned by Viacom. He added that the game was performing well in Europe and Australia but declined to provide specific sales figures.

Reactions from industry experts were mixed. Anita Frazier, an analyst at NPD, said Beatles: Rock Band enjoyed "very strong sales." But Michael Pachter, an industry analyst at Wedbush Morgan Securities, described the initial performance of it and Guitar Hero 5 as "disappointing."

However, he said, "as console sales pick up around the holidays, "music-themed games will see sales pick up as well."

Pachter had estimated that the Beatles: Rock Band would sell 1.3 million units last month. Jesse Divnich, director of analyst services for Electronic Entertainment Design and Research, estimated that the game would sell 1 million units.

Viacom aimed its initial marketing blitz at experienced gamers but is planning to go after a broader audience of Beatles fans.

"Our campaign going into the holiday period will be geared toward the more casual consumer," Guthrie said.

The media conglomerate will need sales for the Beatles: Rock Band to hold steady, if not improve, to make up for its sizable investments in rights to the band's music and likenesses, for which it paid a minimum guarantee of about $10 million, according to a person close to the game.

If the game continues to sell well, three people familiar with the deal terms said, Viacom could easily shell out $40 million or more in royalties.

Previous Rock Band games have lost money for Viacom, largely because of their money-losing instrument controllers. For the Beatles game, Viacom charged a hefty $250 for a limited-edition version with instruments. Guthrie said the company would not be replenishing supplies of the bundle with instruments to stores and instead would focus on selling the game disc, which carries a larger profit margin.

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ben.fritz@latimes.com

alex.pham@latimes.com

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