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Analysis: U.S. Music Game Sales Have Dropped Fivefold Since 2008
Analysis: U.S. Music Game Sales Have Dropped Fivefold Since 2008
November 19, 2010 | By Staff

November 19, 2010 | By Staff
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More: Console/PC



After months of analyst discussion and shrinking software revenues, Viacom's announcement of its decision to sell respected Rock Band progenitor Harmonix was perhaps the biggest item of evidence yet that the music game genre -- at least, console titles equipped with instrument peripherals -- may be well past its prime.

Weak sales of the latest installments in console retail game bundles point to consumer fatigue of both the genre and its high price point.

Bundles that retailed well above normal disc-based retail were responsible for the gangbuster revenues initially seen by brands like Guitar Hero and Rock Band, but they also created the impossible comparison points and inevitable year-over-year revenue contractions in the years that followed.

Further adding to injury is that once music games were largely perceived to have reached market saturation, their revenues shifted from retail to add-on content like tracks, albums and other DLC.

There may yet be new opportunities for the genre in new generations of motion control; Harmonix's Dance Central for Kinect has received widespread critical acclaim.

But alongside his in-depth analysis of October NPD results, Gamasutra analyst Matt Matthews discovers just how severe the contraction is, at least at U.S. retail:

"Several months ago we looked at the decline of the music game segment, and this month we revisit that area one last time," he writes. "As the figure below shows, sales of music games have dropped by more than a factor of five since 2008."



"While the figures above are only for the January – October period, we can at least give full-year figures for 2008 and 2009," Matthews continues. "The total haul for music games in 2008 was over $1.6 billion. That dropped to over $870 million in 2009. Short of a Christmas miracle, music games won't break $400 million for all of 2010."


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Comments


Andrew Dice
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I really hope this surprises nobody. Once you push out multiple titles a year and saturate the market, you're going to see revenue plummet. This shouldn't surprise anyone who understands economics or purchasing habits.

Robert Marney
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The revenue distance between a $180 Rock Band bundle, a $100 Guitar Hero bundle, and a $60 game accounts for a huge portion of this drop, even without market saturation driving away any existing customers. Plus, Rock Band 3's main selling points involve new accessories to their own hardware, constraining the audience further.

Danny Cowan
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This is especially depressing considering that Rock Band has evolved to the point where gameplay now has the potential to teach real musical skills. The many more thousands of people who bought the first few Guitar Hero games -- who may have been willing to learn an instrument or otherwise become more musically inclined when pushed in the right direction -- are now missing out on a key experience after getting burned by dozens of creatively bankrupt Guitar Hero games.

warren blyth
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I wouldn't give up on the public's ability to smell quality. Activision can pay to market crap down their throats quickly, But nothing beats the slow spread of quality word of mouth (which I'm now convinced Pro Guitar will elicit). I think it's sad that right now, when Rock Band3 needs a strong marketing push, they're being dumped.



* I enjoyed the bundled keytar enough to feel Rock Band3 was something new and worthy. Played "normal" mode once before trying out Pro keys, and will never go back.



* Last night I received my "pro guitar", and : found it was astonishing. Again, I will never go back.



Played through the first 5 "goals" in Rock Band3 with it. Transformed me from kind of afraid and flustered (just as I was years back with the first Rock Band guitar), to thrilled and grinning as I completed beloved songs on ProEasy (white stripes and faith no more, ftw!).



It's really a perfect "real-guitar" tutor (I think real world guitar training, via tutor or DVD, is infinitely worse actually, because they're so boring and usually locked to one style.).

I'm convinced this will move me towards my fantasy of learning to play music on a real guitar. (so that's priceless?)



- My girlfriend balked at the number of buttons (102), and claimed she'd never touch it. Then I reminded her that it doubles as a bass guitar trainer (which she's fantasized about learning), and I could see that she's hooked. (We have an electric guitar and bass sitting on stands in our living room, each next to its amp- just gathering dust each month. because good tabs are hard to find online, and because it's such a huge un-fun learning curve. Until now?)



- I'd complain that this week's "mustang" Pro Guitar is actually harder than a normal guitar, due to its uniform squishy fret buttons (Harder to tell if my fingers on the same "string"). So while I dig it, they can definitely improve on it...



- I now plan to buy a second RB3 Pro guitar (for girlfriend at least). And I see that the upcoming fender strat will be an actual stringed guitar which I can go plug into an amp. And will cost less than a brand new real guitar.



So... A really amazing value proposition/progression innovation. Currently about halfway through playing itself out. I don't see the value in projecting it's failure based on Activision's market flooding. !!!



(* to be fair, I was also impressed with the DJ hero investment. fun game, and unique quality peripheral. But I only had to pay 20 bucks to pick it up, and don't yet plan to get the sequel. sooo. a confused example?)

warren blyth
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This sounds like negative forecasting to me, purely for people who care more about their stock gambling than the realities of game development? (it seems to say "without taking the latest products and innovations into account, lets forecast why this genre is dead").



I'm very curious whether Viacom's decision to dump harmonix is just a safe bet ("we're getting out at a guaranteed high water mark, because the waters look choppy from here on out") or actually a wise informed bet ("we know for a fact that harmonix has no other ideas").



Isn't it lame to prognosticate based on "people are tired of buying cheap plastic" instead of "people will always enjoy playing with music." I think Harmonix has shown that they really understand how to cater to people's fantasies, as well as the nitty gritty tricks of addictive/layered rewards-based game design.



Would be very curious to see just Harmonix's sales numbers (with guitar hero 3+, and the other spam removed). Will reserve my judgments until after the dust settles on JUST RELEASED Dance Central and RockBand3 (including the sales of Pro Guitar, and the upcoming sales of the "Fender Squier Stratocaster")

Tomer Chasid
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i think this analysis tells a lot about public perception. True, innovation can spark a boost in interest but there's a difference between innovation for entertainment purposes and that of business need. There a lot of other factors which I'm sure Gamasutra's analyst Matt Matthews took into consideration... such as taking into account that a pro guitar is going to be upwards of $150 and a midi fender strat, albet squier, is going to be at least $300. that alone lessens the accessibility of the game and in a down economy increases this effect.

Ian Uniacke
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I'm sorry but Guitar Hero 3 was considered the best of all the games by many people and Harmonix didn't even work on it. It's also by far the best selling of the bunch, selling well over 15 million copies. Your analysis just wouldn't hold any water...of course maybe what you mean is "are Harmonix as a company improving sales?"



Well I can't do a full analysis but here is a quick analysis:



Rock Band 1 (360): week 1: 223,586, week 10: 896,574

Rock Band 2 (360): week 1: 347,802, week 10: 855,455

Rock Band 3 (360): week 1: 117,888



(all values are estimates only, from VGChartz)



From this small sample I would guess (with only a small percentage of certainty of course) that rock band games are becoming increasingly front loaded, and furthermore that sales of the most recent edition are very depressed.

Brian McDonald
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I don't think judging these games by retail numbers is very telling of their actual popularity and profitability. Not only are sales number inflated from the high cost of bundles, but the added cost of shipping and creating these bundles probably makes them no more profitable than normally priced games.



Furthermore, games like Rock Band are more of a platform. No matter how many iterations are created, the game is really all about the music. If I were looking at sales numbers for these games, I'd look at DLC sales. My guess is Harmonix pulls in more profit from DLC than it ever has at retail.

Lo Pan
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Perhaps if that Rock Band ABBA Sku had been greenlit.

Aaron Truehitt
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They got boring.

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DanielThomas MacInnes
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Every videogame fad comes and goes. It certainly doesn't help when companies stomp the fad to death in a mad rush. We're already seeing that play out in the new Just Dance genre, which has now replaced Guitar Hero.



In a sense, your parents WERE right: videogames are a fad. The trick is that a new fad always comes in when the old one dies. Pong, Space Invaders, Pac-Man, Super Mario Bros, Sonic the Hedgehog, Street Fighter 2, Mortal Kombat, Tomb Raider, Super Mario 64, Tony Hawk Pro Skater...yadda yadda.



It's really too bad that Rock Band 3 is dead on arrival, because we finally had a chance to teach kids how to play actual instruments. One can imagine what would have happened if the genre wasn't steamrolled so recklessly, and if the economy was more solid. Is the game industry even aware the economy is a wreck? Judging by all the expensive gadgets on store shelves, I'd guess "no." Strange.

Jamie Mann
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I don't think anyone can deny that the music-game genre has lost a lot of it's value, but the article is working on incomplete data, for two reasons:



1) The latest music-game iterations (Guitar Hero 6, Rock Band 3, DJ Hero) have literally only just been released, so haven't yet made an impact on the 2010 figures



2) We're missing the most significant part of the year for game sales: November - December. As a result, there aren't any figures from Christmas sales (and Thanksgiving, in the US).



A recent Gamasutra article on Nintendo gave some idea of how much revenue is earned in this period: between 33-44% - given the social aspect, I'd expect music games - and associated hardware - to be at the higher end of that scale. Assuming this holds true (and with the new-game effect lending a hand), it's fairly likely that the music-game genre will hit $400 million by year end.



(http://www.gamasutra.com/view/news/31494/FilsAime_Holidays_More_I
mportant_To_Nintendo_Than_Rivals.php#comment72458)



Interestingly, there's another point to consider. Back in 2008, the Rockband band-in-a-box setup cost $230, or nearly four times as much as the standalone game. In other words, the value of the music-game software in 2008 was somewhere around $250 million. So if 2010's final valuation manages to exceed this, it implies that the genre is actually still healthy - and possibly even growing!

Ian Uniacke
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Very good points.

Matt Matthews
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Read the last paragraph again, please. It addresses full-year sales.

Jamie Mann
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I did:

"While the figures above are only for the January – October period, we can at least give full-year figures for 2008 and 2009," Matthews continues. "The total haul for music games in 2008 was over $1.6 billion. That dropped to over $870 million in 2009. Short of a Christmas miracle, music games won't break $400 million for all of 2010."



However, I don't agree with the final analysis, given the two factors I listed above:

1) at least 5 newly released music game titles + hardware: RB3, GH6, DJH, Dance Central, Just Dance 2

2) Christmas is reported as accounting for 35-44% of annual sales)



With the chart indicating Jan-Oct sales of approx. £200 million, point 2) alone implies a range of $307 - $357 million. Throw point 1) into the mix, and $400 million looks like a reasonable expectation, not a miracle!



Admittedly, anything above that (e.g. $600 million) will be a stretch...

Matt Matthews
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Last year saw sales of BRB, GH5, DJH1. Those were huge releases, heavily promoted, especially BRB which had an extremely high average price. This year we have basically the same release slate, less promotion, lower initial sales, and lower average prices.



Yet we should expect sales in Nov - Dec should more than double sales in Jan - Oct? You can look at absolute figures all you want, but the ratios of the past couple of years don't bear out your hypothesis. I'll be happy to be wrong.



Dance Central is the only new title and its sales are naturally limited by Kinect sales. (Not that Kinect won't sell, but that you can't expect 2 million copies to sell when there aren't 2 million potential owners.)

Jamie Mann
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Matt,



We may end up having to agree to disagree - and we'll find out one way or another in January. But I think my logic is fairly solid :)



To recap: Nintendo are on record as saying their Christmas software sales equate to 44% of their annual sales. There's a number of parallels between the music-game industry and Nintendo's more popular"casual" merchandise: both tend to involve peripherals, both make good presents and both tend towards social-gaming. All told, it doesn't seem unreasonable to take Nintendo's figures and apply them to the music-game industry.



Secondly, having done a bit of digging: the majority of music games are released in September/October timeframes (RB3: Oct 26; GH6: Sept 29; JD2: Oct 12). As such, they've had minimal impact on the year-to-date sales.



Thirdly, a look at the figures for the Xbox 360 on vgchartz (with the usual pinch of salt) indicates that the sales follow the usual pattern: after Christmas, the sales tail off drastically. For instance:



Rock Band 2: released September 14th: 350,000 sales in Christmas period (approx 30% of total sales)

BRB: released September 9th; 460,000 sales in Christmas period (approx. 50% of total sales)

Guitar Hero WT: released October 26: 1,000,000 sales in Christmas period (approx. 60% of total sales)



Finally: there's also a fair number of new music games which have just been released on the Wii: Just Dance 2; Michael Jackson Experience, Glee Kareoke Experience - in particular, amazon.com shows Just Dance 2 to be the most wished for item and the most gifted; it's also currently #2 in the Wii sales chart and it's dragged the original Just Dance back up to #16 in the charts.



All told (assuming these kareoke-style games count as music games), there's likely to be a significant amount of revenue coming from the Wii alone...



But anyway. We'll find out come January!

Andre Murphy
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Look. I don't think the music genre has reached its peak and now is about to go extinct. New Ideas need to be brought to the table which elevates gameplay. After all, we've only seen guitars, drums, and keyboards as playable interments. Im waiting for violin hero, saxophone hero, trumpet hero, harp hero (YES , SERIOUSLY), tuba hero, harmonica hero, orchestra hero, etc......



In other words there are too many instruments to have fun playing before this genre dies off.

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Maurício Gomes
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It would be totally awesome XD



Also trumpet hero!



Or... theremin hero! ok, not this one, it would be TOO hard, I mean like Contra squared hard.

Keith Yap
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it was a fad and frankly they could have released one game and simply gave updates unless it was a major change and songs bought should be carried over...

David Eckelberry
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I agree. I enjoyed playing Rock Band at parties, but now the plastic instruments collect dust just like the Wii. And like the Kinect will.



The music game thing was a fad to 90% of its audience. Like other fads, this one will collapse down to 10% of its height.

Mike Weldon
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Sometimes I wonder if marketing people actually believe that just because I bought something one year, that I will buy it every year. I am not sick of guitar games at all. I am sick of buying new ones.

Nicholas Ulring
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Thank you Activision for ruining rock games by making people sick of them with the countless guitar heroes. There should have been no more Guitar Hero games after 2 when Harmonix left. Now they are doing it with Call Of Duty. 3 Studios working on one series. How ridiculous and stupid is that. Watch. 2013 Activision is going to wonder why Call Of Duty is not doing nearly as well and people are going to be laid off.


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