Marketing 12th Edition by Charles Lamb,Charles Lamb,Joe Hair

Exercise 10

EMBRACE YOUR INNER ROCK STAR
Before the 2005 release of Guitar Hero , you had probably never heard of Harmonix. The video game design studio quickly found itself in the spotlight when Guitar Hero became the fastest video game in history to top $1 billion in North American sales. The game concept focuses around a plastic guitar-shaped controller. Players press colored buttons along the guitar neck to match a series of dots that scroll down the TV in time with music from a famous rock tune, such as the Ramones' "I Wanna Be Sedated" and Deep Purple's "Smoke on the Water." Players score points based on their accuracy. In November 2007, Harmonix released Rock Band , adding drums, vocals, and bass guitar options to the game. Rock Band was originally released with a $169 price tag (most video games retail at $50-60) and sold over five million units in its first year. In 2006 Harmonix's founders sold the company to Viacom for $175 million, which allowed them a larger budget for product development and music licensing for the games while retaining their operational autonomy.

One of the keys to the success of Harmonix and Rock Band was its appeal beyond the core gamer demographic, reaching first-time gamers and families. The company was originally founded by Alex Rigopulos and Eran Egozy in 1995 and focused around a company vision of providing a way for people without much musical training or talent to experience the joy of playing and creating music. The founders believed that if people had the opportunity to create their own music, they would jump at the chance. Their first several attempts to market their concept, however, fell fl at-while the software always proved technically impressive, people generally expressed little interest in trying it out, or didn't seem like they were having much fun if they did.
In 2000, Rigopulos and Egozy hit on a concept that engaged consumers, and Harmonix became a video game company. The move from software to video games gave Harmonix's ideas a sense of purpose and a way to use the competition found in video games to help engage, direct, and motivate players. At the time, however, the market for music-based games had not fully developed, and Harmonix produced several rhythm-based games that proved too complex and expensive to gain a broader audience.
Harmonix finally found some measure of success in its 2004 release of Karaoki Revolution , in which players scored points singing along to pop songs. This allowed the player to be a part of the music. In 2005, Harmonix partnered with Red Octane, a company that made peripheral video game controllers and had a similar philosophy for attracting gamers, and together they created Guitar Hero. Guitar Hero put players in the role of the lead guitarist in a rock band that was climbing its way to stardom. The game soundtrack, filled with remixes of classic American rock 'n' roll hits, would appeal to a broader musical audience and the guitar controller put the iconic instrument of American rock 'n' roll directly in the player's hands. The game was released in November 2005 and when retailers set up in-store demo kiosks, game sales went through the roof.
After the success of the first game, even real rock stars began to pick the game up, demonstrating its broad appeal. Music labels started to jump on the bandwagon, allowing the licensing of actual songs rather than just composition rights. The franchise achieved even greater appeal as it made its way onto the Nintendo Wii, a video game console that broadly appeals to families and casual gamers.
When Rock Band 2 came out in 2008, the market for music-based games appeared to have reached maturity. As sales fell, Harmonix and its competitors began aggressively pushing new products into the marketplace in the form of expansion games and downloadable content packages. Prices fell in an attempt to rekindle sales. In 2009 and 2010, Rock Band expansions with the Beatles and Green Day both underperformed.
By the end of 2010, when Rock Band 3 was released, many analysts predicted the music-based video game market would disappear almost as quickly as it had appeared. In its first weeks on the shelves, Rock Band 3 moved barely 250,000 copies of the game despite positive reviews and new features, such as "Pro" mode. "Pro" mode allows experienced musicians to more closely simulate playing an actual guitar. Harmonix had gone from creating a $600 million blockbuster to being an expense for Viacom. In January 2011, Viacom closed the doors on the gaming industry, selling Harmonix for $50 million in tax incentives, the divestiture of Harmonix's liabilities, and $50 in cash.
Use the five product characteristics to analyze the rate of adoption for music-based games.