Killing the Golden Goose: The collapse of Guitar Hero

It was only a couple of years ago that the music industry stood outside the doors of the games industry, cap in hand, hoping for saviour  from an inevitable demise. Guitar Hero represented a prime example of a game with an ecosystem of weekly downloadable content that could present a valid new revenue stream for the music industry. On 8th Feb 2011 Activision killed the Guitar Hero brand.

Guitar Hero and Rock Band had fuelled huge revenues on Xbox LIVE. There were 20 million Rock Band downloads in 9 months which fuelled the digital economy on consoles. Xbox had an 80% share of the music games download market.

For a brief period the rapidly increasing volumes of downloadable games tracks were beginning to shape the music chart and briefly considered as a chart eligible format for the UK music charts. If that would have happened it would have been unique as two different entertainment mediums would have contributed to a single music chart position. Not only would it have  illustrated the emerging importance of game DLC in the wider entertainment market, but would also emphasise its importance as a source of revenue for the rights holders (the record labels). The exact shape of this new digital economy, grew rapidly, then collapsed

In the past 3 to 4 years downloadable content on consoles has become a large and lucrative market for the publishers and platform owners. It is a market that has first mover advantages (due to the length of the development cycle). When content creation is fully integrated into the development cycle and creates revenue allied with customer insight it underlines the primary reasons why a consumer may have bought a product from physical retail in the first instance. It provides very valuable data about the appeal of a product over a prolonged period. The music industry has no such insight as once a consumer has bought a product, their engagement and relationship with the product is invisible.

The music industry are slack-jawed to see the evaporation of a revenue stream that was short-lived. The implications for Rock Band will be fascinating to watch, as the legitimacy of a genre seems in doubt.

Have music games left the building?


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