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UPDATE: Viacom Planning to Sell Off Rock Band's Harmonix

by Matthew Kato on Nov 11, 2010 at 09:00 AM

UPDATE: Both Viacom and developer Harmonix have released statements on the pending sale of the developer.

Harmonix: “This morning’s announcement does not affect the ongoing work at the studio as we continue to support our existing franchises, Rock Band and Dance Central. As stated earlier, Viacom is in discussions with several potential buyers and will continue to fully support the business until a sale is completed.”

Viacom: “As announced this morning, Viacom plans to sell Harmonix. The decision to exit the console gaming business reflects our strategy of focusing entirely on what we do best: Make great branded entertainment content and deliver it through a variety of platforms. Harmonix has and will continue to create terrific video games, and we will support the business until a sale is complete. Viacom is in discussions with several potential buyers.”

 

ORIGINAL STORY: In a financial report detailing the profit and revenue of its various business entities – including MTV Networks, MTV Games, and Harmonix – parent company Viacom revealed that it plans to sell off Rock Band developer Harmonix today.

An article by Bloomberg states that Viacom's net income declined in the last quarter, but that the company intends to sell Harmonix today. Apart from this casual reference, however, nothing more was said about the sale, who was buying Harmonix, and other important details. There was certainly no mention of the state of the developer, its publisher MTV Games, or the health and future or possible lack thereof of the Rock Band franchise.

Viacom CEO Phillipe Dauman simply said, "The console games business requires expertise and scale we don't have."

MTV Games bought Harmonix in 2006 for $175 million, and the studio put out Rock Band in 2007. 2009's The Beatles: Rock Band was a high-profile venture by Harmonix and MTV Games, but it's widely believed that the game's sales couldn't recoup the tremendous licensing costs paid for the rights to use the Beatles' music.

This development certainly puts MTV Games in a lurch, as Harmonix is the publisher's cash cow. The studio just put out Rock Band 3 and Kinect's Dance Central, but it's too early to tell the sales numbers of these titles. Given Viacom's sale of Harmonix so closely after the release of these games, it would appear that the timing on Viacom's part was planned all along. However, the sale also brings up questions about the state of Harmonix itself. Would Viacom cut the developer loose if it was doing well? Does Viacom believe that music games are on the decline and wants to get as much money for Harmonix while the getting's still good? Or maybe someone offered Viacom a deal so great it couldn't refuse.

We'll keep you updated on this story as we find out more.