Last month, Viacom quietly announced it was looking to sell one of their struggling divisions, Harmonix Music Systems, the makers of the popular Rock Band video game series. Surprisingly, this division has been hemorrhaging for quite some time now, and I have to wonder what the cause could possibly be.
Admittedly, I am not a hardcore gamer, but it seems that the Rock Band brand has been very popular and selling well, especially after the release of the Beatles version. Let’s face it, Viacom and Harmonix inked the legendary band before Apple was able to convince the gate keepers of the rights to loosen the reigns. Was the poor profitability Viacom mismanagement, or does the game simply have a narrow audience base?
Well, the sale has now been finalized and we will see if the new owners, Harmonix-SBE Holdings, which is an affiliate of closely held Columbus Nova, can turn a profit. Columbus Nova manages more than $10 billion of assets through various funds and portfolio companies. Financial terms of the sale were not disclosed.
Viacom, owner of MTV and Paramount Pictures, is currently in arbitration with the former owners of the Rock Band studio over terms of the 2006 purchase. It sounds like Viacom has run this portion of the business into the ground and is simply looking for ways to recoup some of their loses. I mean come on, you bought the entity in 2006 and all of a sudden there are questions as to the purchase and sale agreement? Sounds fishy to me.
After the news of the sale, Viacom stock took a hit in trading, falling 23 cents to $39.17 in New York Stock Exchange Trading.
If you are a fan of “Rock Band”, let me know what you would do to improve it as a whole and if you think Viacom just bit off more than they could chew.