he love triangle between Harmonix, RedOctane and Activision gets even steamier over royalties involving their music-game love-child – Guitar Hero.

A little history for those late to class: Harmonix Music Systems – currently owned by Viacom – knows the formula for great music games. They are
 the creative force behind FreQuency, Amplitude and Karaoke Revolution (in conjunction with Konami). Their November 2005 release of Guitar Hero – published by RedOctane – was an instant smash hit. The high financial success of Guitar Hero prompted Harmonix to release Guitar Hero II in 2006.

In June of 2006, RedOctane, the publisher of the original two Guitar Hero installments, was purchased by fellow publisher Activision. July 2007 yielded the final Harmonix Guitar Hero release, Rock the 80s, under the watchful eye of RedOctane / Activision. MTV Networks, a division of media conglomerate Viacom, then acquired Harmonix from RedOctane / Activision. The change in ownership meant leaving the Guitar Hero IP behind with Activision – who appointed Neversoft in charge of creating the most recent release in the Guitar Hero series – Guitar Hero III: Legends of Rock.

Despite leaving Guitar Hero behind, MTV and Harmonix have had a fruitful relationship. The partnership between the two birthed the immensely popular game Rock Band. With all the success – both critically and financially – you may ask: why does Harmonix have its panties in a bunch? 

The problem – other than their merger history being massively confusing – is that Harmonix alleges Activision still owes them royalties exceeding $14.5 million for the latest Guitar Hero installment – Legends of Rock. The rational is that Activision is obligated to pay the money for using technology created by Harmonix as part of the Guitar Hero III development process. Variety outlines an agreement Harmonix made with original publisher RedOctane stating that if any sequel to the Guitar Hero games – derived from their original IP – were made by a company other than themselves, Harmonix would be paid the higher of two predetermined royalty rates. Harmonix also claims they are owed additional royalties for song downloads, in-game advertising and other less-notable products.

Harmonix claims they were paid the lower of the two rates – reserved for if a developer created a new Guitar Hero game from scratch. The discrepancy results in the $14.5 million dollars. Activision claims that they have paid everything Harmonix is due. On Monday of this week, Harmonix filed a suit against Activision with the above charges. By Tuesday night, the suit was dropped – prompted by Activision agreeing to begin talks with Harmonix. These talks are extremely important to Harmonix if they hope to profit from the slew of new Guitar Hero games already in production. Activision has already announced three new additions to the franchise – including the Guitar Hero Aerosmith edition, set to come out later this year. Harmonix says that if things don’t work in their favor, the losses "will mount at the rate of tens of millions of dollars per year."