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Viacom Sells Harmonix to Privately Owned Company

by Neal Ronaghan - December 24, 2010, 2:40 pm PST
Total comments: 9 Source: (Press Release), )

The Rock Band developers will continue to support Rock Band 3 and are working on "some unannounced projects."

The entertainment giant Viacom sold Harmonix, the developers of Rock Band and Dance Central, to Harmonix-SBE Holdings, which is owned by Columbus Nova, an investment firm that manages more than $10 billion of assets.

Harmonix, which was bought by Viacom in 2006, will go back to being an independent developer that is privately owned. In the sale, Harmonix will retain the IP rights to Rock Band, meaning they can make new entries in the series if they choose. Additionally, the sale does not affect their relationship with EA, who distributed Rock Band 3, and Mad Catz, who make peripherals for the series.

"The DLC schedule marches on for Rock Band," said Harmonix's John Drake about the company's future. "We will continue our support of previously released titles and we're hard at work on some unannounced projects that we think you're going to be pumped about."

Viacom Sells Harmonix Music Systems

NEW YORK, Dec. 23, 2010 /PRNewswire via COMTEX/ --

Viacom Inc. (NYSE: VIA and VIA.B) announced today that it has sold Harmonix Music Systems to Harmonix-SBE Holdings LLC, an affiliate of Columbus Nova, LLC. Financial terms of the transaction were not disclosed.

Viacom announced its intention to sell Harmonix, the leading maker of music-based games including the Rock Band music video game franchise, in November.

About Columbus Nova

Founded in 2000, Columbus Nova ("CN") is a multi-strategy investment firm managing over $10.0 billion of assets through its own funds and affiliated portfolio companies. CN has a broad investment mandate which allows investments across all levels of the capital structure from senior secured debt to equity. CN takes a value-oriented, long-term view to investing and seeks consistent returns with an emphasis on capital preservation. CN is headquartered in New York.

About Viacom

Viacom, consisting of BET Networks, MTV Networks and Paramount Pictures, is the world's leading entertainment content company. It engages audiences on television, motion picture and digital platforms through many of the world's best known entertainment brands, including MTV, VH1, CMT, Palladia, Logo, Nickelodeon, Nick at Nite, Nick Jr., TeenNick, Nicktoons, COMEDY CENTRAL, Spike TV, TV Land, BET, CENTRIC, AddictingGames, Atom, Neopets, Shockwave and Paramount Pictures. Viacom's global reach includes approximately 170 channels and 500 digital media properties in more than 160 countries and territories.

For more information about Viacom and its businesses, visit www.viacom.com.

Talkback

TJ SpykeJanuary 04, 2011

An update: Columbus Nova technically only paid $49.99 for Harmonix. However, they also assume all liabilities of Harmonix. This include music licensing fees, equipment, unsold inventory, etc.

http://www.industrygamers.com/news/harmonix-sold-for-4999-plus-liabilities---report/

MaryJaneJanuary 04, 2011

Those liabilities are the very reason for the sale, so probably a good move on Viacom's part, as they've essentially gotten rid of a huge chunk of debt.

Mop it upJanuary 04, 2011

Interesting. Rock Band is a popular name so I'd have thought they'd want to keep the franchise, but I guess it wasn't making them enough money.

TJ SpykeJanuary 04, 2011

Harmonix was their only involvement is the video game industry, I guess they didn't want to invest in another developer.

ArbokJanuary 04, 2011

Quote from: Mop

Interesting. Rock Band is a popular name so I'd have thought they'd want to keep the franchise, but I guess it wasn't making them enough money.

Correct me if I'm wrong, but didn't Rock Band not make them any money? I think the franchise was in the red since day one, and stayed that way. It was set up for a "long term strategy", which started to look foolish once the music genre became so oversaturated and consumer interest waned.

Caffeinated CheeseJanuary 04, 2011

Quote from: Arbok

Correct me if I'm wrong, but didn't Rock Band not make them any money? I think the franchise was in the red since day one, and stayed that way. It was set up for a "long term strategy", which started to look foolish once the music genre became so oversaturated and consumer interest waned.

I don't think Rock Band ever had any serious long-term strategy.  Otherwise the state of the genre wouldn't be so wierd right now.  Nor would they have pushed out their Wii product half a year late.  The export songs option wouldn't cost money to do.  Things like that.  I think Viacom gave Harmonix free reign over themselves and just expected profit to happen without looking at the general state of the market or their key consumers.

ArbokJanuary 04, 2011

Quote from: thatguy

I don't think Rock Band ever had any serious long-term strategy.  Otherwise the state of the genre wouldn't be so wierd right now.  Nor would they have pushed out their Wii product half a year late.  The export songs option wouldn't cost money to do.  Things like that.  I think Viacom gave Harmonix free reign over themselves and just expected profit to happen without looking at the general state of the market or their key consumers.

That's very possible too... it was just my assumption that they had a long term strategy, since they were losing money from the get go.

Also, my guess is they didn't expect the current state of the genre... I think they were predicting an "ever green franchise", ala Madden, where they could pump the games out year after year and see them hit the top ten charts. What they failed to calculate was that between them and Activison churning out music game after music game that people were going to get burned out of the genre pretty quick.

ShyGuyJanuary 04, 2011

I'm glad the music genre is dead. I look forward to Nintendo breathing new life into it with Wii Music 2.

Ian SaneJanuary 05, 2011

If Viacom had a long term strategy for Rock Band I think that was not such a bad idea.  It was Activision that killed the genre through over-exposure.  I don't expect Viacom to have been able to predict that that would happen.

But what both companies failed to grasp was what people REALLY wanted.  No one wanted to buy a new game every year or buy band specific games or constantly buy new hardware.  They just wanted to play their favourite songs with their friends and the way to do that was with an iTunes-like download service.  But they got greedy and wanted to sell new doodads every year and make special exclusivity deals with certain acts.  We had TWO games which made no sense.  Certain artists insisted on having special track packs and stuff like that.  To give people what they really wanted there needed to be a lot of cooperation between Harmonix, RedOctane, Activision and the artists.  If they all played ball they would all have made fistfuls of money and likely had a sustainable product that could go on for years and maybe even seperate itself from any console and be its own platform.  The potential was huge.  But everyone was in it for themselves and the whole thing turned into a fad that everyone got sick of.

In most cases I encourage competition in business but this was one situation where it really was not ideal.  Sometimes you just need a standard.

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