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The "Guitar Hero" Business Model Is Dead; Long Live Music Games (on Mobile)

Activision Blizzard (ATVI) announced the end of the long-running Guitar Hero series, citing weak sales. This comes just weeks after Viacom (VIA) sold off Harmonix, the creator of Guitar Hero rival Rock Band. While critics are calling it the end of the once-popular music game genre, other companies are making a mint. Between mobile gaming and skyrocketing equipment prices, the economics just couldn't support the Guitar Hero/Rock Band plastic instrument model anymore.

Needless upgrades, expensive plastic equipment
Nineteen Guitar Hero games came out in the past six years, which is an insane rate for any video game series. The Rock Band series was less flagrant, but the changes were incremental and the previously bought instruments were not always compatible -- an ugly reality for consumers who bought $200 worth of equipment.

Forget the games, though: For Activision Blizzard, MTV Games, and equipment makers, instruments were the ultimate cash cow. The multi-instrument package for the latest music title, Rock Band 3, ran $360. The companies obviously haven't shared how much it cost to manufacturer these items -- why would they? -- but I suspect the cost was low considering the instruments were plastic and, in most cases, couldn't be used outside of the game itself.

Why did Guitar Hero and Rock Band ultimately fail? Consumers got tired of paying hundreds of dollars for fake instruments that weren't compatible with every version of the game.

Music has gone mobile

The tiresome home music gaming model has pushed audiences to the smaller screen, namely the Apple mobiles. Leading the pack is Tap Tap Revenge, a rhythm game inspired by the very music games it replaced. Originally released when the iPhone app store launched in 2008, the series became popular enough for Disney (DIS) to acquire its creator, Tapulous, for an undisclosed sum. The latest game, Tap Tap Revenge 4, got more than six million downloads in three weeks -- enough to take the number one spot from Rovio's extremely popular Angry Birds. The current price of Tap Tap Revenge 4? Free: It's supported by in-app purchases of new songs to play.

You'll see a similar pattern with Activision Blizzard's DJ Hero vs. Algoriddim's DJ App, and dozens of other mobile titles that have made the music software cheaper and more accessible than their console counterparts.

Activision Blizzard and Viacom were right to throw in the towel on the music-instrument genre. The music game industry, however, is anything but dead.

Photo courtesy of tofer618 // CC 2.0
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