Rock Band - History

History

Prior to Guitar Hero and Rock Band, Harmonix had already established itself as a company that made game products that focused on music interactivity. Born out of Massachusetts Institute of Technology's Media Lab, the first product made by Harmonix was The Axe: Titans of Classic Rock for DOS-based computers, challenging the player to use four keys on the keyboard to match notes in several songs. Looking to find a place for this type of game, Harmonix' founders Alex Rigopulos and Eran Egozy looked to Japan where music games like PaRappa the Rapper were becoming popular. This led to the creation of Frequency and its sequel Amplitude for the PlayStation 2; both games featured the concept of matching notes for specific instrument tracks along lanes. However, in retrospect, Harmonix found that players had initially difficulty understanding the game, as the presentation was an abstract concept that did not immediately connect the gameplay to the music. The idea of making an easy connection between the game and the music was used as a basis for their Karaoke Revolution games, which including using avatars singing and dancing in time to the music to strengthen the connection; this series was financially successful and helps to grow the company.

Harmonix was approached by Red Octane to help develop the software for the first Guitar Hero game, itself based on Japanese games like GuitarFreaks. Harmonix used their previous experience in note-matching techniques from Frequency and Amplitude, as well as the lessons learned in developed Karaoke Revolution to create the Guitar Hero software. Harmonix was less concerned on developing gameplay, and instead more on connecting the player to the music, working to track the notes of the songs appropriately on the five-button controller as to make the player feel like they are playing the real instrument. Guitar Hero would go on to be a major success and found the basis of the Guitar Hero series.

As the success of the Guitar Hero series grew, Harmonix and RedOctane were purchased by MTV Games and Activision respectively, in 2006; MTV paid $175 million to acquire Harmonix. RedOctane continued to publish the Guitar Hero series, bringing Neversoft on board for development duties. Harmonix was contractually committed to completing one final title, Guitar Hero Encore: Rocks the 80s, during and after the purchase negotiations.

With MTV Games, a subsidiary of Viacom, Harmonix took their experience from developing Guitar Hero and Karaoke Revolution to create the Rock Band series. According to Harmonix Vice President of Product Development, Greg LoPiccolo, the Harmonix team had already envisioned the possibility of different instruments before they were completed with the Guitar Hero series; Rigopulos noted that the Guitar Hero work was only a partial approach to this, limited to what they could do on a "shoe-string budget". Harmonix also embraced the idea of Rock Band as a platform rather than a software title, and took steps to incorporate downloadable content to extend players' music libraries without having them need to buy a new software disk. Rock Band was considered a success, leading to the development of sequels and spinoff titles. Viacom under the terms of the acquisition, paid out $150M in performance-based bonuses to Harmonix in early 2008 for their 2007 results, and were planning on a similar amount by the end of 2008. The Rock Band series scored what was considered a major coup by journalists when it successfully negotiated the rights to use the music of The Beatles in a video game, long considered a "holy grail" for music games.

By 2009, the market for rhythm games in general started to fall. The market had become saturated with titles, mostly from Activision's expansion of the Guitar Hero series, and consumers affected by the late-2000s recession were less likely to buy costly instrument controllers. Viacom had already reported significant losses on the Rock Band series, and sales of The Beatles: Rock Band did not meet their expectation. Viacom sought a refund on the $150 million already paid for the 2007 bonuses following its reassessment of the series' 2009 performance. Harmonix, anticipating the slowness of the market, developed Rock Band 3 with the introduction of several new features, including keyboards and Pro instruments, to create a "disruptive" game in the ailing rhythm game market.

Though Viacom continued to support the series throughout 2010, it announced that it was seeking a buyer for Harmonix, citing the series' continued profit losses and Viacom's inexperience at being a video game publisher. Harmonix was eventually sold at the end of 2010 to Harmonix-SBE Holdings LLC, an affiliate of investment firm Columbus Nova, LLC that included Harmonix shareholders. Though the net liability of the sale was valued at nearly $200 million, including existing unsold inventory and ongoing music license fees, analysts believe that Harmonix-SBE paid only $50 for the company, taking on the total financial liability that Viacom was able to write off in their books. The MTV Games division at Viacom was later closed.

As a shareholder-held company, Harmonix has retained the rights to the Rock Band and Dance Central franchises, and continues to support and develop the games. The company still faced some fallout from the sale, laying off about 15% of its staff in February 2011. In the same month, Activision announced that it has abandoned ongoing development of planned Guitar Hero titles, which many journalists considered to signal the end of peripheral-based rhythm games. Though Harmonix considered the closure of Guitar Hero as "discouraging", they recommitted that they will continue to develop Rock Band and Dance Central and support their downloadable content for the immediate future. Other journalists believe that without competition, Harmonix no longer needs to develop under the same pressure, allowing them to polish and innovate for future titles in the series, as well as a likely future resurgence of the market.

In March 2012, Harmonix affirmed that it had no plans for a fourth major release title within the year, but is still strongly supporting the game through downloadable content through the year. By early 2013, the company stated that while they may come back to Rock Band at a future time, they were shifting resources to develop new titles, and later announced that it would discontinue its regular downloadable content for the series after providing over 275 continuous weeks of such content. In a recent issue of Game Informer magazine, co-founder/CEO of Harmonix commented on the future of Rock Band by saying "While we don't have any active title releases in development right now, it's never far from our thoughts, and you can be sure that this franchise will be back, guns blazing, at some point in the future when the time is right."