Rock Band Management

The Rock Band video game developed by Harmonix Music Systems, Inc. dropped during the 2007 holiday season. If Harmonix rings familiar to you, it should. These were the developers of Guitar Hero, Guitar Hero II and Guitar Hero Encore: Rocks the 80s. As enthusiasts may tearfully recall, Harmonix and publisher RedOctane broke up and went their separate ways post-GH II. Gaming giant Activision snapped up RedOctane in 2006, followed by MTV's acquisition of Harmonix for a handsome sum of $175 million. What resulted was a very literal battle of the bands.

Guitar Hero cornered the market on music games and incited what many considered to be a revolution in the industry. But when splitting with RedOctane, Harmonix left with some aces in its back pocket -- patents for the underlying technology that the series is based on. Cha-ching!

Harmonix Music Systems founders Eran Egozy and Alex Rigopulos are today's Big Boi and André 3000 of the video game world. Together, they have a Midas touch it seems, in spite of the split from Guitar Hero producer RedOctane. Egozy and Rigopulos' roots are firmly grounded in rhythm action games, starting out as fellow students at MIT before building titles including Karaoke Revolution, Frequency and Amplitude.

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Eran Egozy, Harmonix co-founder and vice president, and Greg LoPiccolo, vice president of product development.

Although now owned by Activision, the Guitar Hero franchise surpassed $1 billion in North American sales in January of 2008, setting an industry record [source: Berardini]. Rock Band has held its own as well since its November 2007 release, with parent company Viacom announcing that the game had sold more than 3 million units as of May 2008. Its first quarter financial report for 2008 also attributed Rock Band as a main driver in the company's 33 percent revenue boost [source: Associated Press].

What are people buying besides the $170 retail game? The game's Web site hawks merchandise to soup up and protect your instruments, including drum bags, guitar/bass faceplates, mic stands, straps, stools and drum silencers (so your neighbors won't call the cops). For the high-end rockers who want to take it to the next level, there are $200 cuff links, $2,400 jackets, piles of T-shirts and actual playable instruments for sale. But before you go on a spending spree, remember you can't pay for your gear with that cool cyber cash you earn in the game.

­Then there's the downloadable content, or DLC. The video game has cut deals with musicians to place these songs and albums online. Harmonix adds new songs each week to its in-game store and the Xbox and PlayStation 3 marketplaces. By allowing players to continually download and learn new songs, Harmonix is extending the life of the game. Rock Banders have definitely taken that cue, buying 10 million songs as of May 2008 [source: Sliwinski].

Artists are chomping at the bit to get in the Rock Band mix as well. As with Guitar Hero, the game has opened up a new forum for musicians to gain cred and coin. Motley Crue got wise to the idea and released a single exclusively on Rock Band. Not a bad move considering that sales on the video game exceeded those on iTunes and Amazon.com by almost four times [source: Kohler]. Individual songs range from 99 cents to $2.99 [source: Snider]. Full albums from Metallica, The Pixies, The Cars, Judas Priest and more are also going for upwards of $15 a pop.

What's next in this corporate battle of the band games? Take a look at the Guitar Hero Web site for an idea. Looks like Activision is bringing out its own version of a full-band rhythm action game, entitled Guitar Hero: World Tour. As for Rock Band, you can expect to be able to battle in world tour mode online. Both Harmonix and Activision have hinted at allowing players to make their own music via video games as well.