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Kotick:  Guitar Hero  Now $2 Billion Franchise
Kotick: Guitar Hero Now $2 Billion Franchise
May 8, 2009 | By Simon Carless

May 8, 2009 | By Simon Carless
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More: Console/PC



Talking following the Activision results, CEO Robert Kotick reveals the Guitar Hero franchise is the third game in history to reach $2 billion in sales, criticizing a "rather precipitous [sales] falloff" for MTV's rival music game Rock Band.

As part of the financial call, when quizzed on the Guitar Hero franchise, which Activision Blizzard continues to expand significantly, announcing several new iterations for this year, the company had several notable comments.

In particular, Kotick highlighted increased market share in the music genre for Guitar Hero, criticizing the "rather precipitous falloff of [Rock Band]" as a retail franchise. (However, it appears that Rock Band 2 is concentrating on digitally distributed add-ons that aren't tracked via retail.)

He also revealed that the Guitar Hero franchise has now reached $2 billion in sales, something that the company claims is the third in history, after Mario and Madden, to do so.

He also noted that Guitar Hero: Metallica "is off to a good start", and it has a large installed base of peripherals to pick from now, since 15 million unique households now have Guitar Hero hardware installed.

Given that the company also revealed during the call that 40 million "professional songs" have been downloaded (presumably both free and paid) for the Guitar Hero franchise to date, alongside 14 million GH Tunes "user-generated songs", it's easy to see why Kotick might conclude: "We're bullish on the music category."

[UPDATE: Difference between professional, user-generated songs clarified.]


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Comments


Jamie Mann
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Lies, damned lies and statistics. It's all good :)



Actually, that DLC number is worrying - 40/15 works out to around 2.7 songs per household. It'd be interesting to compare that to Rock Band's DLC efforts - and to find out the free/paid ratio.



Also, I have no idea how the revenue breakdown for DLC works, but with overall income from DLC around $60 million (assuming $2 per song and a limited number of free downloads), DLC is clearly not a major revenue stream when compared to the $1.94 billion raised via hardware/expansion pack sales to those 15 million households.



Admittedly, I'd dearly love to have that kind of money sliding into my wallet, but overall it's pretty easy to see why Activision is going for yet more themed retail expansion packs: they may be risking market saturation and player ennui but the profit margins are much, much higher!

Jamie Mann
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Edit: yon post sounds a bit confused.



Revenue breakdown for DLC: does anyone know how much of a cut the music industry and the platform owners (i.e. Sony/MS/Nintendo) take?



Regarding the $2 billion in sales, does this include or exclude DLC? Either way, DLC accounts for barely 3% of the revenue stream...

Andrew Dovichi
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For all we know, the "40 million songs have been downloaded" line could also reference the user created GHTunes songs. It would be down right deceitful to include those songs in the figures, but I wouldn't exactly put it past any of the major publishers.

Simon Carless
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Andrew/Juice: we went and listened to the call again to clarify your questions, and there was a clearer breakdown of the stats in a separate part of Kotick's comments - it's actually 40 for all "professional songs" and 14 million for "user-generated" songs, we updated stats in story/comments.

Jamie Mann
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@Simon: thanks for the update! It's intriguing to see that 14 million user-generated songs have been created. Overall sales figures for GHWT appear to be in the 7-million range, which implies that there's more people picking up this feature than I would have expected - though there's a major factor in the presence of an X360 achievement for uploading a UG song.



Back to the professional songs, the top 3 downloads on XBL are all free DLC. Picking a semi-random number, I'd guess that these probably account for a third of all "sales" and it's not unreasonable to estimate the number of paid-for professional songs as being in the 25-million range.



$50 million in revenue still isn't chicken feed, but it's very much a drop in the bucket for AB...

Andrew Dovichi
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Juice: I'm fairly certain there aren't 14 million user created songs, I think that means that 14 million have been downloaded.



Thanks for the breakdown Simon!

Carl Chavez
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Juice: here's a minor correction... to get the number of downloaded professional songs per household for the GH series, you have to divide 40 million by the number of GHIII and GHWT copies sold (except for GHIII-Wii, which did not support downloadable content), not the number of GH hardware units. This is because GHIII and GHWT are the only versions of GH with downloadable content. If you count from hardware units, you also include people who have only purchased GH I-III, people who have purchased more than one hardware unit, etc. Thus, 40 million divided by 13 million would show 3.07 downloaded songs per owner, which is lower than Rock Band's estimated 4 songs per user (as of Jan 2009, according to Reuters).

Jon Boon
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It's too bad with the amount of revenue that Guitar Hero generates, Kotick can't do anything to actually further the franchise beyond milking the customers. It's also too bad that Guitar Hero is more popular than Rock Band despite being a worse game than the latter as well as being an obvious "do as little work for as much profit as possible" I will be happy the day that he is gone from the video game industry, and video games as a whole will be better for it.



Ah well, hopefully people will realize that Activision run by Kotick is the Wal-Mart of video games and stop supporting it. But I doubt it. Wal-Mart isn't as big as it for because of its intelligent shoppers...

Bob Stevens
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"Ah well, hopefully people will realize that Activision run by Kotick is the Wal-Mart of video games and stop supporting it. But I doubt it. Wal-Mart isn't as big as it for because of its intelligent shoppers..."



Take your intelligence and apply it to the fact that Activision is in a strong position in the game industry right now, and maybe determine if that's because of Kotick's leadership or not.



He's hot right now, and it's a good thing for all of Activision's employees and all of their fans. You're basically saying that because they make games that you don't care about, despite the fact that millions apparently care about them enough to buy them, you wish they were out of business. Don't be that guy. That guy's a dick.

Jon Boon
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I'm simply saying that Activision, under his leadership, is making the state of gaming itself worse overall. I don't like Activision, nor any company in the gaming industry, under people like him, who care nothing of the games themselves, only of the almighty dollar. Those kind of people will happily "exploit" every franchise they have until they grind it into the dirt, and make everyone sick of it, thus making the industry poorer for it. Instead of looking to the future, he is looking for the quick buck. I hope, as I alluded to before, that Kotick himself will be ousted and leadership that actually cares about the future of the industry is put into place.



Although on the flip side, he is making everyone else look better by default, so it's not all bad.


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