Mobile, Social Music Games Put Guitar Hero Out Of Business

Activision announced this week that it would discontinue the Guitar Hero line of music games for consoles and disband its Guitar Hero business unit. This announcement follows Viacom‘s recent decision to sell Rock Band developer Harmonix to investment firm Columbus Nova. This isn’t the death of the music game genre, but merely a sign that its future lies in freemium mobile and social games, rather than in packaged console releases sold at retail.

“A game like Guitar Hero costs $100 and requires a lot of time investment to master it,” said Bart Decrem, co-founder of Tap Tap Revenge publisher Tapulous, in statements made to Music Week. “Tap Tap Revenge is free, easy to start playing and includes lots of different genres and acts – like dance, alternative, Metallica and Lady GaGa. As many women as men play Tap Tap Revenge. It’s very casual and very social. There are tremendous opportunities there.”

Tapulous was acquired by Disney last July for an undisclosed sum. The first Guitar Hero game came out in 2005 and is widely credited with popularizing the music game genre. The genre is thought to have peaked with the publication of Guitar Hero III: Legends of Rock in 2007. Activision says that Guitar Hero III was the first video game in history to gross over $1 billion in sales. Beginning in late 2009, however, sales of music games for consoles began to noticeably decline.

The Fall Of Music And The Rise Of Social

Marquee entries in the genre like Electronic Arts’s The Beatles: Rock Band and Activision’s own DJ Hero failed to meet sales expectations, despite substantial promotion and pre-release hype. The game bundles were growing more expensive, with The Beatles: Rock Band retailing for $249.99 with bundled controllers and DJ Hero retailing for $119.99 with its special controller. Part of the music game slump on consoles was driven by an industry-wide sales slump that began in late 2009. In October of last year, the NPD Group reported that overall video game sales were down 8% to $4.9 billion between January and September 2010.

The music genre’s sales crashed by 50% during that same period, however, to $152 million. Music Week says that music labels now see mobile and social games as better venues for marketing new acts and generating additional revenue, in part due to the rise of social games like FarmVille roughly coinciding with sliding sales in the music game category on consoles. eMarketer has forecast that social game revenues will exceed $1 billion this year. Virtual world Habbo Hotel generated over $6 million through sales of virtual goods in December 2010 alone.

One of mobile social network MocoSpace’s first self-published social games is the free-to-play music-themed game Stage Hero, which racked up over 350,000 users in its first month of operation.  Booyah’s music-themed social game Nightclub City was one of Facebook’s breakout hits in 2010, recently spawning its own album of music composed exclusively for the game. Artist Dr. Dre has also partnered with Zynga to promote his newest album, similar to the way acts like Metallica once promoted new releases through Guitar Hero.

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