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Wednesday, September 9, 2009

The Beatles Rock Band finally goes on sale

Paul DeGooyer was standing backstage when reality finally set in.

It was June, and the 43-year-old executive at MTV Networks Music Group was fretting the details of the presentation going on in front of him at the Electronic Entertainment Expo in Los Angeles, when the familiar chords of "All you need is love" suddenly filled the amphitheatre.

At that moment, Paul McCartney and Ringo Starr sprang from the wings and bounded across the stage, greeted by a raucous roar from the crowd.

The two legendary Liverpudlians were on hand to show off features for a new video game based on the music of the most famous rock and roll band in history, The Beatles. The project that Mr. DeGooyer had sweated over had finally come to life.

"It was pretty mind blowing," said Mr. DeGooyer, senior vice president of electronic games and music for MTV, based in New York. "It really was the moment that it became real."

Wednesday that reality comes full circle when The Beatles Rock Band finally goes on sale in North America, giving gamers the chance to relive the Fab Four's historic catalogue while rocking out on plastic guitars, bass and drums.

For MTV, the Beatles game represents the beginning of the latest chapter in the ongoing battle for music game supremacy between its own Rock Band familiy of games and Activision Blizzard Inc.'s Guitar Hero franchise -- the latest edition of which, Guitar Hero 5, hit stores last week (Sept. 1). Both games will be available on all three major consoles, Sony Corp.'s PlayStation 3, Microsoft Corp.'s Xbox 360 and Nintendo Co. Ltd.'s Wii.

Beatles Rock band is also just the latest example of the expansion of the new video game after-market economy.

Users will also be able to purchase a special edition bundle of the game, which includes plastic replicas of Mr. McCartney's iconic Hofner bass and Mr. Starr's Ludwig drum kit -- plastic versions of John Lennon's Rickenbacker 325 guitar and George Harrison's Gretsch Duo Jet guitar will be sold separately.

For Beatles fans, the Rock Band game marks the first time the band's catalogue has ever been available digitally -- the group's music is still not available on Apple Inc.'s iTunes store, nor any other digital distribution outlet -- and arrives on the same day Apple Corps. and EMI Music will release re-mastered editions of each Beatles album. The game comes with 45 songs and the complete albums Rubber Soul, Abbey Road and Sgt. Pepper's Lonely Hearts Club Band will be available for download, for a price.

Together, the hardware and software add-ons represent one of the most high profile examples of how game publishers can continue making money on a game once it's been bought by a consumer, by selling peripherals and downloadable content (DLC).

Together, the two franchises (Rock Band and Guitar Hero) have generated more than US$3-billion in global sales since the first copy of Guitar Hero hit store shelves in 2005. Although gamers will have to fork over about $60 to purchase the Beatles game itself, the special edition instrument bundle will cost $250. Each additional guitar runs about $100 while songs in the Rock Band store generally cost about $2 each.

Game developers are increasingly turning to peripherals and downloadable content (DLC) as a means of generating new revenue streams once a consumer has left the store after purchasing a game.

Although some video games -- such as Electonic Arts' John Madden Football -- can sell millions of copies of new versions on a yearly basis, the video game industry has often suffered from a lack of recurring revenue, a problem downloadable content helps solve, said Carl Howe, an analyst with the market research firm The Yankee Group.

"One of the great contrasts between entertainment software and other kinds of software is that unlike Microsoft Office, for example, video games aren't the sort of thing that you buy over and over again," he said.

It's not just music games that are making the most of DLC. Games such as Tiger Woods PGA Tour 09 allows users to purchase new golf courses or equipment to spruce up their gaming experience, while other games such as Call of Duty 4 offer gamers new maps to use while playing online.

"Certainly from a top level there's been a shift from the buying of the plastic to the buying of the software," said Mike Hickey, a financial analyst who tracks the video game industry for Janco Partners.

["Downloadable content] is a significant priority. Even though it's hardly material right now, digital is certainly where the future is."

***For console makers such as Sony and Microsoft, the DLC for games such as Rock Band and Guitar Hero are important for getting consumers more comfortable with using their proprietary Web-based networks to purchase other content such as full games, movies and music.

To date, more than one billion pieces of content -- movies, music, games, etc. -- have been downloaded through Microsoft's Xbox Live network, while Sony's download total tops 450 million.

Of course, extra content keeps games fresh for players, which keeps them coming back and playing online. As long as enough gamers keep playing the game online to sustain a competitive community -- as is the case in games such as Halo and Call of Duty 4 -- publishers can continue to charge top dollar for the game at retailers.

Guitar Hero and Rock Band have also been credited with helping bring the market for gaming peripherals -- a niche market once reserved for fans of racing games willing to buy expensive steering wheels -- into the mainstream. The success of Nintendo's Wii Fit game last year, which featured a balance board that allowed users to perform various exercises, and other accessories has allowed manufacturers to enhance the gaming experience while shipping more products.


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