Viacom to sell Rock Band creator Harmonix

By Geoff Duncan November 12, 2010

Image used with permission by copyright holder

Media titan Viacom is getting out of the video game business: as part of its third quarter financial results, the company announced that it plans to sell Harmonix, developers of the Rock Band video game franchise, among other titles. Despite the initial success of Rock Band, Viacom head Philippe Dauman indicated the company intends to get out of the video game business altogether. “The console game business requires an expertise and scale that we don’t have,” he said.

Viacom has now classified Harmonix as a “discontinued operation.” During the third quarter of 2010, Viacom wrote down $260 million related to Harmonix.

Viacom has been looking to unload Harmonix since September, and industry reports have Viacom in talks with both video game developers as well as private equity firms. Current speculation is that Viacom will hold an auction for Harmonix, with three or four major bidders aiming to take control of the company.

Viacom bought Harmonix back in 2006 for $175 million, with a followup payment of $150 million in 2008 to conclude the deal. Harmonix’s Rock Band title was an initial hit with gamers, and last year’s much-touted The Beatles: Rock Band was a surprisingly well-received release, and marked the first time the digital versions of the Fab Four’s music were legally available. However, Harmonix has been struggling against Activision/Blizzard’s Guitar Hero juggernaut—ironic, since Harmonix developed the initial versions of Guitar Hero before segueing on to Rock Band.

The sale of Harmonix might not just mean changes for Rock Band: Harmonix also had a console game development deal with Hollywood mega-producer Jerry Bruckheimer (CSI and Pirates of the Caribbean).

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