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NPD: Behind the Numbers, June 2009
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NPD: Behind the Numbers, June 2009


July 20, 2009 Article Start Previous Page 4 of 5 Next
 

Declining Music Game Sales

June 2009 was the second consecutive month without a Rock Band or Guitar Hero title in the top 20 software titles. The last time the software charts went two months without one of these franchises was in September and October 2007, right before the launch of Guitar Hero II on the PlayStation 2.

As we've commented before, these franchises are being guided in different ways by their respective publishers. MTV Games, the publisher of the Rock Band products, has released a sequence of Track Packs to provide new content to retail consumers. These $20 to $30 packs offer a variety of tracks or a set of themed tracks (e.g. country, classic rock).

As of this writing, there are effectively seven Rock Band titles in the console and handheld market, including the track packs and Rock Band Unplugged for the PSP. The next major game in the series, The Beatles: Rock Band, is expected in Fall 2009.

For its music game series, Activision Blizzard has also released track packs, but two could be considered more elaborate Guitar Hero expansions headlined by famous rock bands: one for Aerosmith in Summer 2008 and another for Metallica in Spring 2009. (A Van Halen package is expected in late 2009.)

These packages retail for $40 and higher, and have been bundled with guitar controllers. Activision Blizzard has also released three versions of Guitar Hero for the Nintendo DS, although those games are not compatible with the newer Nintendo DSi (which lacks the requisite Game Boy Advance slot for the extra guitar frets hardware).

To date there are over a dozen Guitar Hero titles from Activision Blizzard, from the original Guitar Hero through Guitar Hero: World Tour, and including the handheld versions along with themed/licensed expansions. Guitar Hero 5 is currently scheduled for release in Fall 2009.

Music Game Revenues

The revenue, however, is not scaling up with the number of releases. Much of the initial revenue for both of these music games was generated through higher priced hardware and software bundles, including guitars, drums, and microphones. Fewer such bundles are being sold today, and consequently the average price of a piece of music software has declined.

According to data reported by Mr. Pachter of Wedbush Morgan, combined revenue from these two franchises during February – June 2009 has declined 49% from the same period in 2008. Revenue for the Guitar Hero franchise is down a more modest 34%, while revenue for the Rock Band series is down a more striking 67%.

For the year (including January) we estimate that significantly more than 3 million Guitar Hero software units have been sold for consoles and handhelds. During the same six-month period, just over a million Rock Band products have been sold (again, on consoles and handhelds).

Sales in the back half of 2009 will determine the future of the music game business. As consumers increasingly opt for software over expensive hardware bundles, the companies behind these games will see a commensurate drop in revenue.

While the publishers will probably still work with retailers to distribute music game controllers (albeit in lower volume), look for these games to shift to in-game storefronts to attract consumer dollars. The recent announcement of Rock Band Network, for example, is but one way that these games can expand their market without relying on retail sales of hardware and software.


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