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Harmonix Earns Possible $208.7 Million Bonus From Viacom
by Brandon Boyer
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March 3, 2008
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Media giant Viacom has its most recent yearly financial report, highlighting a possible $208.7 million in performance-based earnouts for developer Harmonix, following the success of Rock Band, published by Viacom subsidiary MTV Games.
MTV Games first acquired Harmonix in late 2006 for $175 million, making the studio part of the MTV Networks' Music and LOGO Enterprises unit, led by executive vice president Jeff Yapp.
According to Viacom's latest statement, the acquisition included a clause that "to the extent financial results exceed specific contractual targets against a defined gross profit metric through 2008" -- that is, should Harmonix's sales exceed MTV's expectations -- "former Harmonix shareholders will be eligible for incremental earn-out payments with respect to the years ended December 31, 2007 and December 31, 2008."
As of December 31st of last year, the filing (originally reported by PaidContent) notes, Harmonix had $208 million set aside for them, with "a final payment with respect to the year ended December 31, 2008" expected to be given to the studio in 2009.
According to December's NPD sales figures, Rock Band had broken a million in unit sales over the holidays, with MTV noting that as of mid-January, the game had already moved over 2.5 million downloadable songs.
The game first appeared on the NPD's charts for January. NPD said at the time that the Xbox 360 version "was the top-selling game in dollar terms, bringing in $30 million in sales for the month."
[UPDATE: 10.20am PST, Monday - corrected nature of payout as being 'set aside' for possible earn-out payments, rather than already paid.]
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-A.