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The Divnich Tapes: Music & Rhythm Game 'Fad' On The Way Out
The Divnich Tapes: Music & Rhythm Game 'Fad' On The Way Out
November 20, 2008 | By Jesse Divnich

November 20, 2008 | By Jesse Divnich
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[Following last week's release of NPD's October North American sales figures, EEDAR's director of analytical services Jesse Divnich presents his Gamasutra-exclusive study of October's hardware and software trends.

In this analysis, Divnich speculates that the music and rhythm game "fad" has already reached its peak, as the number of genre titles balloon and Guitar Hero World Tour sales show a 60 percent drop over the previous main game in the series.

Previously: Predictions on November's top-selling software titles, October still crowded with top releases, and how Sony's consoles could be more affected by current economic conditions than Microsoft or Nintendo's systems.]


It is safe to assume that Guitar Hero World Tour failed to meet the market’s expectation, by producing a series-over-series decline in sales of nearly 60 percent. Today we will examine why this occurred.

First, using data from VideoGamePriceCharts.com, a data outlet that tracks reseller prices on video games, we can see that the Band Kit version of the SKU experienced significant shortages across retailers. This drove the average reseller price well above the retail MSRP.

According to unnamed retail sources, Activision did not produce enough of the Band Kit SKU to meet retail demand. A similar problem that occurred in the previous holiday season with Rock Band and MTV Games, who knew manufacturing plastic instruments was such a complex and difficult process.



Nonetheless, the competitive landscape of the music & rhythm genre has significantly changed since last year.

Most analysts felt that these intruders in the music & rhythm genre would not significantly affect sales of Guitar Hero World Tour. The actual results, however, indicate a different trend.

The music & rhythm genre was down by almost 40 percent year-over-year in units, which is notable since this October had triple the amount of music & rhythm SKUs.

Even if supply was sufficient, my estimate is that Guitar Hero: World Tour would have still likely been down by close to 40 percent year-over-year in units, which is equal to the decline of the entire genre.



This data suggests that the music & rhythm genre in its entirety has decreased in popularity over last year. This could indicate that the congested October AAA release schedule played a hindering role in music & rhythm sales.

However, I feel other factors likely played a role; posisbly, the huge amount of sales the genre generated last year was simply a part of a nationwide fad.

Understand, however, that "fad" is not necessarily a negative term. Fads can last for several years, and while they seem short-lived in comparison to the time we spend on this planet, they are considerably lengthy by video game standards.

Dance Dance Revolution is a good example, as it has been around for over 10 years, and it still remains somewhat popular today. However, it is not nearly as popular as it was five to seven years ago. I believe that instrument/singing games are following a similar course, but on a bigger scale.

That being said, I do believe the music & rhythm category is definitely here to stay, and it will always have a large and loyal market base. I believe, however, we may have seen a peak in sales from the category -- at least, until, the next big craze sweeps America, whatever that may be.

We will be sure to do a follow-up article in January to re-examine this scenario, once November and December sales are in.

[Jesse Divnich currently serves as the director of analytical services at Electronic Entertainment Design and Research (EEDAR). The preceding is the views and opinions of one person and not of EEDAR, The simExchange, GamerMetrics, or Gametrailers.]


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Comments


Anthony Charles
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I don't know if I'd attribute these sales figures to the genre being a "fad", but their business model is much different from that of other games. I haven't followed this genre very closely, but as I understand it, many of the accessories are not intercompatible. If someone's going to drop in excess of $100 on accessories for a music game those are almost definitely going to be the only music accessories that person is going to buy. Perhaps that person might upgrade from Rock Band 1 to Rock Band 2, but even that seems unecessary when so much content is downloadable.



We're also talking about a different type of gamer. Alot of these people just want something to play casually as a goof with friends once a week so the need to upgrade is removed because the content of the first purchase does not get exhausted.



And yes, there is a fad element.



I'd liken the business model of these games more to that of a video game hardware than software. A large initial investment where the gamer expects prolonged returns in the form of downloadable content.

Kahn Jekarl
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It doesn't make sense to only look at unit sales. When you consider the PRICE of World Tour ($170) versus the price of GH3 ($60 for just the game), you only need to sell 1/3 as many UNITS of World Tour to equal the same amount in revenues.



Even when packaged with a guitar, GH3 is $80-90, so you only need to sell 1/2 as many World Tour units to get the same revenues.



So let's try to present a broader picture and discuss revenues and units sold when speaking about the performance of a game or genre.



Finally, the greater economic downturn was not even brought up despite being a real reason why consumers would hold off on a $170 video game purchase.

Jesse Divnich
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Thanks for the comments.



The genre was significantly down in dollars as well (not as much, but still high). Keeping in mind that the entire industry was up 35% compared to last year, which was well ahead of expectations.



I think the economical aspect doesn't play a major role, if anything it reinforces my theory. The most expensive model is the one that retailers cant keep in stock. It has a higher demand than any other model. The economic downturn shouldn’t be taken into consideration, given that other genres and the entire sector showed growth well beyond expectations.



Using units as a metric is a good way to measure the overall market base of a genre/title/sector. Comparing dollars/dollars doesn’t necessarily paint a picture of the entire size of the market.



Don’t get me wrong, there are strong points that can be made against my arguments, but you have to admit, that the evidence is overwhelming that there is a significant problem in the Music and Rhythm genre.

josh barnett
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I think people are just sick of spending 100-200 dollars on a game. These games are great for parties, but really, there isn't sufficient improvement between them to justify that much being spent. I think that rhythm games on this scale are going to become a novelty, but I don't think that of rhythm games in general. I think this is the point where rhythm games start to influence other genres, just like RPGs and MMOs have.

Allen Seitz
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@Kahn: It's not necessarily true that publishers make more money on a $170 game. The bundled hardware could be really expensive to make/ship/sell. For example, DDR is a $60 bundle. But the game is $40 and the controller is $25. To me, that sounds like a 'free' pad (technically at cost).



Which makes sense. Because asking the player to buy your controller is asking them for a favor. I don't think anyone makes money (or much money) off of the hardware. I'm really just guessing, but it seems very reasonable that the profit margin on the bundle is the same as the game itself.

Kahn Jekarl
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While Profits are indeed, the bottom line, my post was strictly talking about Revenues, certainly a widely-used metric for a company's financial health.



Overall, I think it's a bit early to discuss trends. The economic downturn can affect different people at different times, so let's see how it all shakes out once all the holiday numbers are in.



Gamasutra, can you let me know when someone replies to a thread???

Jesse Divnich
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It is correct that it is too early to reach any final conclusions. But what I am trying to do is forecast the final conclusions. I think Analysts are made fun of a lot in the media because we "predict the obvious." What I try to do different with my articles is predict the not-so obvious using factual based evidence.



Will I be right? Directionally I will be. I don't see the genre being "up" in units this holiday season. Dollars might be close though, we will see.



Is Rock Band or Guitar Hero going anywhere? Not at all. There will be Rock Band and Guitar Hero releases for the next 10-years. No doubt about that. The name or gameplay will change/evolve, but there is no doubt that the Music genre is here to stay. It is just a question of how it will evolve over the years.

Tawna Evans
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I don't like that this article uses sales of rock performing games to ascertain the success of the music rhythm genre as a whole. I wish there would be separate measurements for the rock performing games and other rhthm games, such as DDR or Sing Star. There's a chance that sales for rock might be declining more rapidly than other games in the music genre.



Also, I find other music rhythm games far more appealing than the rock performing games. Why? I hate heavy metal and I'm not too fond of rock music. The problem with Guitar Heroe and Rock Band is that the target audience of those games is limited to people that like rock or heavy metal. There are lots of other types of music that different people enjoy and would prefer games that incorporate music of the other types.

Jesse Divnich
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Thanks for the comment.



Just one side note, the 40% y/y decrease was just on new releases. But overall, there was still a decline.



Yes, it is unfortunate that a lot of different types of Music & Rhythm titles get lumped into one genre. At EEDAR, we track sub-genres as well. For the Music & Rhythm we have four sub-genres, Dancing, Singing, Rhythm, and Musical Instrumental. Future articles will likely break them up into those categories.



Overall, the Rhythm/Singing games are doing just fine. Specifically, the “DDR” style of games, which reached its peak years ago, so right now it is in a steady state. Singing games do fluctuate and are definitely more popular in other regions such as Europe.



But thanks for the suggestion. I think any after-holiday analysis on the subject should specifically break out those sub-genres.


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