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UBS reports Activision beat Rock Band 2-to-1 in November rhythm-game revenues--but 30.8% year-on-year earnings slide despite product doubling rings alarm bells.

This week brought some good news for Activision: Guitar Hero World Tour was November's top music game. Though NPD hasn't released any specific sales figures other than the Wii version's 475,000-unit tally, UBS analyst Ben Schachter provided a run-down of the Guitar Hero franchise's sales for the month. He also tabulated the combined sales of Electronic Arts, MTV Games, and Harmonix's rival series, Rock Band According to Schachter, just over 1.7 million Guitar Hero games were sold in the US during November 2008, a 25.3 percent decrease from the nearly 2.3 million the year prior. All Rock Band games, by contrast, sold fewer units by comparison--just 628,452--but saw a massive 64.7 percent increase in sales from the year before.


However, when only revenue is considered, the disparity between the two franchises narrows. Guitar Hero games generated $145.9 million in the US last month, down 19.5 percent from November 2007's $181.1 million. However, thanks to an installed base of instruments, Rock Band games didn't see that much of an uptick, rising just 9.7 percent to $68.7 million during the month.

While impressive, Rock Band and Guitar Hero's combined $214.6 million haul was actually a 12 percent slide from November 2007. More disturbing for Activision is the steep decline in both revenues and units for the Guitar Hero franchise. In November 2007 Guitar Hero III's six SKUs--or individual retail product configurations--generated 1.9 million units in sales, amounting to combined $158.8 million. In October 2008, Guitar Hero World Tour sold just 978,000 units, minting just $109.8 million.

Though Schachter blames the lower number in part on constrained supply, he echoed a colleague's concerns that this downward trend is a sign that the rhythm game market may be saturated. "This will fuel concerns that the genre is past its peak," he said in a note to investors. "With Activision and others sure to bring new innovation to the genre next year we can't count it out, but it almost certainly won't be the growth driver it has been over the past two years."



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1 Response to "Guitar Hero World Tour sells 978K in Nov."

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