November 11, 2010
Viacom Selling Rock Band Franchise
Viacom is planning on selling its Harmonix video game development company, which is the creator of the Rock Band franchise.
Analysts have questioned the value of the Rock Band franchise for a company known for its cable networks MTV, Comedy Central and Nickelodeon."The decision to sell Rock Band is welcome news," Christopher Marangi, an analyst at Gabelli & Co told Reuters on Thursday. "The franchise has been a disappointment and a drag on earnings."
Viacom Chief Executive Philippe Dauman said on a conference call with analysts that the company decided to put Harmonix up for sale because it did not have enough expertise to continue in the gaming market.
"Harmonix has and will continue to create terrific video games," Viacom CEO Philippe Dauman said. "But for us, it is about focus. The console games business requires an expertise and scale that we don't have."
Harmonix has been dragging down the company's earnings for the past several quarters as people continue to avoid big shopping sprees.
Games like Rock Band have struggled because of the pricey accessories that are required to play them.
Dauman said that Viacom is talking with several potential buyers. However, he did not say when it plans to close a deal or how much it hopes to get for the company.
The Rock Band game brought on a loss of about $65 million before interest, taxes, depreciation and amortization. The company did not provide a revenue figure or comparison earnings figure a year ago.
Viacom's Paramount Pictures film studio saw a modest increase in revenue, although it slipped in profit because of fewer releases.
Viacom's net income dropped 7 percent to $854 million in the same period of 2009.
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