MTV Games: 'We Outsold [Guitar Hero] Two To One'

With this month's NPD figures showing that Harmonix's The Beatles: Rock Band outsold Neversoft's Guitar Hero 5, Beatles publisher MTV Games wants to set the record straight on some misconceptions about music games and the Activision/MTV battle. "We outsold them two-to-one on a revenue basis and we outperformed on a unit basis as well, despite the fact that they had an eight-day advantage, and were giving away free software," claimed MTV Games general manager Scott Guthrie to Gamasutra, referencing Activision's offer of a free copy of Guitar Hero Van Halen with Guitar Hero 5. "At the end of the day, The Beatles: Rock Band clearly outperformed them, and we're not done yet. We're anticipating a very successful holiday period." The Beatles outsold Guitar Hero 5 by about 20 percent across all SKUs on a unit basis, according to further NPD data sourced by IndustryGamers. But Guthrie's claim to Gamasutra of doubled revenue suggests Beatles consumers may have been willing to spend more on the game's multi-instrument bundle -- suggesting in turn that the game may have attracted more new consumers who don't already have plastic instruments in their home. And in a separate statement released to the media at large, MTV claimed that on a pan-platform basis, The Beatles: Rock Band was the second-highest seller based on revenue in September, after Halo 3: ODST, and the third-highest based on units sold. On the whole, however, Guthrie stressed the importance of growth in the overall music game category -- including Activision and its Guitar Hero, which he said "is a great product and adds to the overall music genre" -- despite the predictions of analysts who claim the genre is essentially a fad. "The important thing is that the music genre is up 72 percent versus a year ago," he said. "That's the number both they and us can be very proud of. It even proves some of the pundits wrong -- that the music category is on the decline, or not as vibrant as it used to be." Music games work like any other kind of games, Guthrie explained: they do big numbers when there are big releases and innovation, and they don't when there aren't. "In the month of September, you saw big releases, and certainly innovation on our part, that drove the business to some pretty big numbers, despite a tough economy," he said. Guthrie praised Harmonix -- an MTV Games subsidiary -- as bringing ongoing innovation to the segment. "At the end of the day, it's the guy who continues to innovate and has the most value for consumers who has what the consumer wants to buy," he said. "Innovation is going to be the key factor for this genre, [and] that's why we're thrilled to be working with the guys at Harmonix. They will continue to lead the way. It's just us tagging for the sales and marketing." Prior to the NPD release, RBC Capital Markets upgraded its Viacom rating on expectations of strong Beatles sales -- but also implied that the Rock Band franchise has not reached profitability prior to this latest game release. Asked to comment on the report, Guthrie declined to give details, deferring until an upcoming financial call, but did tell Gamasutra that MTV Games has a two-pronged marketing plan prepared for Beatles. "We're certainly pleased with how it performed, and it's on track with our expectations, both ours and our partners," Guthrie said. "This isn't just a one-week or a one-month launch activity. Our strategy was always that we'd have a great launch in September, target those key gamers, and come back in the holiday period to focus a little more on the folks on the sidelines or not as entrenched in the music category." Added Guthrie, "By the time [holiday] sales are all counted up by the end of January, I think you're going to see that strategy worked out for us." Gamasutra also asked Guthrie whether MTV has had any second thoughts about its comparatively lower number of core retail products versus Activision's with its Hero franchise. "We're hitting our strategy bang-on," the GM replied. "We have great packaged products that appeal to our key market, and once we get people into the category they have the opportunity to download many genres and many artists." As for whether the company has seen any difficulty in ensuring consumer awareness of the download channel, he said while there is still room for higher market penetration in the download arena, he sees the download-oriented strategy as sound. "The strategy is working out for us just fine, and we believe it speaks to our core consumer," he said. "We are now at over 60 million downloads since inception, and that business continues to show double-digit growth. We're over 900 songs and that's growing every week. "There's still a long way to go for all of us as an industry to get consumers engaged, but the [download] model is doing just fine, be it iTunes or the others out there. We're very enthusiastic around the future of that business." And he also suggested Activision's approach might offer its own drawbacks: "I think when you're giving away a great artist like Van Halen, to me it marks a little bit of desperation in trying to move their product," Guthrie said. "Van Halen is a great artist, and it's a pity that they went from trying to sell that product this December to giving it away in September." (Guitar Hero Van Halen was given away by Activision as part of a mail-in offer for anyone buying Guitar Hero 5 in September 2009, but is still scheduled to be released as a standalone retail title in December 2009, according to sites such as GameStop.com.)