Report: Viacom Sold Harmonix for $50

Report: Viacom Sold Harmonix for $50

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What's worth more: A night out at Red Lobster or the studio behind Rock Band?

Viacom put Rock Band developer Harmonix up for sale after determining that console games weren't its bag, and after a week Harmonix was technically able to buy itself. According to an unconfirmed report on All Things Digital, the price paid to snatch Harmonix from Viacom was a scant $49.99.

This might seem like a great price, but the report also says that Harmonix-SBE Holdings LLC, the new owner of Harmonix and affiliate of investment management company Columbus Nova, had to assume a ton of debt and responsibility. Harmonix-SBE Holdings is also now the proud owner of liabilities such as Harmonix's music rights fees and its lots of unsold games and music peripherals.

In addition to the $50, Viacom is reportedly is able to claim $150 million in tax benefits. Viacom, Columbus Nova, and Harmonix haven't commented on the truth of the low number, but it does make sense considering the recent decline in the music peripheral genre.

Call me crazy, but even by assuming an undisclosed amount of debt I think Columbus Nova is set up to reap some potentially strong benefits by bankrolling Harmonix. The decline of Rock Band sales wasn't due to a lack of quality in the series, and Harmonix's Kinect launch title Dance Central is a hit with consumers and critics. Harmonix still owns both of the properties and is said to have new ideas in the works for the future. Harmonix might be at a low right now, but it has plenty of potential to snap back.

Update: Harmonix's official statement to The Escapist reads: "Regarding that story, we're not commenting. Thanks for asking though!" It doesn't look like we'll be able to get confirmation.

Source: All Things Digital, via Develop

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Ha! They beat EA's Project 10 dollar and made 5 times the profit.

(reference to ENN joke)

I'd rather have the night at Red Lobster, to be honest. The claim that "the decline of Rock Band sales wasn't due to a lack of quality in the series" should tell people something, that people are sick of playing such games now, and thus buying a company that only makes such games is a bad idea.

Is it odd that I find the financial numbers side of the gaming business so damn interesting?

I don't care what developer says what, but once money in mentioned, I like reading through all the numbers.

I thought they changed the law to prevent that? I know you can't sell a house for $1 any more, at least in Australia, my grandfather sold my uncle his house that way ages and ages ago to avoid taxes and stamp duties on a sale, and taxes on gifts of all things.

Remember kids, next time you go out to buy a Guitar Hero game [1] remember: You paid 20 dollars more for the game than you could have paid for the company that made it.

[1] Ahahaha! Joke! Get it? Nobody buys those anymore

mjc0961:
I'd rather have the night at Red Lobster, to be honest. The claim that "the decline of Rock Band sales wasn't due to a lack of quality in the series" should tell people something, that people are sick of playing such games now, and thus buying a company that only makes such games is a bad idea.

Long as you ignore the success of Dance Central....

Wow, I've been trying to save up my cash to get the new one and a set of Pro-drum cymbals and here I could've just bought the company.

Fifty bucks? Viacom could have held out for "half price on the cheese fries, and free Miller Lite, on tap."

Onyx Oblivion:
Is it odd that I find the financial numbers side of the gaming business so damn interesting?

I don't care what developer says what, but once money in mentioned, I like reading through all the numbers.

Born accountant are we? I'm the same, but I actually studied accounting. The tax benefits are amazing, no doubt. $150 million is nothing to blink about.

The debt though. THat's interesting. I hope they can overcome it

Bloody hell, how the mighty have fallen...

Though I know the music gaming genre is pretty much dead, and I don't really care much for that kind of stuff anymore, it's still very sad to see Harmonix brought down low... Though $150 million for tax benefits is a lot of money, less than $50 for the studio itself? The people who made Rock Band are now worth less than the game they made? Ouch.

I think the problem with music games is that there's really no need to own more than one. Improving graphics does nothing for this type of game. The gameplay doesn't change. All they can do is add new music, which will only get you so far.

Pretty standard business strategy, selling a loss-making concern for a token price. I've heard of a couple of football teams being sold for £1 each on the understanding that the purchaser would be taking on debts of over £1m.

Onyx Oblivion:
Is it odd that I find the financial numbers side of the gaming business so damn interesting?

I don't care what developer says what, but once money in mentioned, I like reading through all the numbers.

I like #s to, especially when there's a $ in front :)

Interesting. I'm betting that the numbers have a lot to do with the fact that Harmonix has probably invested a lot in new development in the time since they were acquired. I'm sure that they're capable of being a profitable company on their own - they wouldn't have gotten investors otherwise - but probably not as much of a cash cow as Viacom/MTV expected.

I'm still rather unsure of why Viacom posted HMX's #'s as part of the reasoning PRIOR to big releases, yes, the number you posted for losses was huge, but it was the month before RB3 hit, and they were working on Dance Central as well? well there's more of a kick... so wth? DUH, it's going to be a loss up to the point that the game is on sale. It's like Hollywood saying Avatar lost hundreds of millions of dollars... a few weeks before it was released to theaters, it would be true, but... huh?

To people talking about the lack of need for new titles because there's no innovation? Yeah you're partially right, up until this latest generation they probably could have gotten away with just releasing a game update and perhaps selling stand-alone peripherals since between Rock Band 1 being launched and Rock Band 3 hitting there hasn't been a huge update in gameplay to really require an overhaul. But with the new keyboard and pro modes, it's rather a huge update.

The debt is probly the main thing, if viacom transfered debt to the company, your basicly paying fifty bucks to absorb alot of debt and hope that the company next games make enough money to cover the interest on the debt.

 

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