Viacom hoping the Beatles will change its money-losing ways in video games

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After spending over $325 million, Viacom is ready to start making money on video games.

That’s exactly what the conglomerate will start doing, executives say, with this fall’s the Beatles: Rock Band, a pricey and high-profile addition to the genre dominated by Activision’s Guitar Hero.

As a story in today’s Times explains, Viacom has guaranteed the various Beatles rights holders around $10 million and will likely dish out $40 million or more in rights payments. That’s not even counting the tens of millions spent to produce the game. It’s a costly gambit, right in the middle of a recession, that the biggest rock band in history will draw new players to a genre that has been declining this year.

Viacom bought Harmonix Music Systems, the developers of Rock Band games who originally created Guitar Hero, for $175 million in 2006. This year it awarded the studio’s owners an additional $150 million in bonus payments. That’s a huge amount of money, particularly given that the Rock Band games have lost money and been a consistent drag on the earnings of Viacom’s MTV Networks.

But the conglomerate has a new approach to the Beatles: Rock Band that focuses on more profitable software and music downloads over instrument controllers and is confident its marketing blitz, as well as the publicity around a newly remastered reissue of the band’s music, will draw both avid video game players and casual Beatles fans.

By the fourth quarter, MTV Games General Manager Scott Guthrie told The Times, Viacom’s video games operation should finally start making money.

To find out how, and just what’s at stake in the Beatles Rock Band and the highly competitive music video games space this fall, read the story in today’s Times.

-- Ben Fritz