I've been a faithful Activision Blizzard (NASDAQ: ATVI) shareholder for a while now. Sure, I've thought of booking my profits at times, but so far, I've held tight on my long-term position (note: I did do a quick trade with the stock earlier in the summer).
The Guitar Hero franchise is one of the reasons why I keep holding the stock. I figure a lot of units tied to the brand will be sold this holiday season. However, there is a looming threat. Viacom (NYSE: VIA) and Electronic Arts (NASDAQ: ERTS) are set to release The Beatles: Rock Band. The street date is September 9, and analysts will be watching the early sales very carefully to see how the dynamic shapes up.
As you might imagine, as the release date gets closer, I find myself getting increasingly nervous. The Beatles are arguably one of the most influential bands in music history (I'm sure some out there will be irritated that I didn't write the most influential band in music history). The group's name carries weight. The four members are true icons.
But some pundits have expressed doubts that The Beatles will impress the younger demographics. The youth weren't around during the band's heyday, obviously, and they really don't know what all the fuss was about. They have indirect cultural knowledge of the Fab Four. They might retain certain tidbits of information about The Beatles from references made in movies and television sitcoms, but that's as far as it goes. It's like Elvis Presley: so many kids are aware of his myth and reputation, but they've never listened to one of his songs all the way through. He's just an image used to sell things. If The Beatles don't resonate with young people, then Viacom and Electronic Arts may have a problem.
This is what my biased self is hoping. Thinking about it, I'm not sure any person between the ages of 16 and 21 could even name two Beatles. And that arbitrary age range is surely an important one to Rock Band.
There are other problems, though, for all the companies mentioned in this piece. Chris Morris over at CNBC.com discussed recently how the music-gaming genre might not be as hot as it once was. In many ways, his is a frightening article, one that probably should have been published closer to Halloween. And I definitely am starting to sense that the Guitar Hero franchise might eventually run out of steam. Heck, remember when those dance-pad games were all the rage?
I don't know what's going to happen, but I can't wait for September 9 to get here. I want it over with. I'll still hold my Activision Blizzard position, however; I'll await the buzz from the street before I reassess my thinking. I'm not interested in either Viacom or Electronic Arts, but I will say that if the news on The Beatles video game is very good, then Viacom should definitely benefit in future quarters. Rock Band has been a driving force in the past for the media company; perhaps it will be again in the near future.
Disclosure: I own Activision Blizzard; positions can change without notice.











Reader Comments (Page 1 of 1)
9-04-2009 @ 3:17PM
Dave said...
"Thinking about it, I'm not sure any person between the ages of 16 and 21 could even name two Beatles."
You're an idiot. FYI.
9-04-2009 @ 3:52PM
Tom said...
According to a recent Pew study, 45% of 16 to 29 year olds claimed to like the Beatles "a lot."
http://pewsocialtrends.org/pubs/739/woodstock-gentler-generation-gap-music-by-age
9-04-2009 @ 3:53PM
xenogears728 said...
The average gamer is about 25-28 years old and male. I just know the Beatles by name. I don't know any of their songs. And i don't consider this a great addition to the rock band universe. This guy is an idiot lol. But just an fyi, i would be more worried about guitar hero's looming market saturation than anything else. In fact. I'd place my bets on the saturation showing itself the next fiscal quarter.
9-04-2009 @ 4:11PM
e.krabs said...
The latest gaming generation may re-discover Beatles, but frankly, that's just a refresh of an existing franchise, and in my personal opinion, holds very little upside....
To me, what makes this stock long is the upcoming sequels, Diablo III and Starcraft II. These two have already been generating a massive amount of buzz, but you know what? They can very well live up the hype!
I don't see why not. The previous incarnations were so well-made, I think the fan base would be happy with just an updated "more-of-the-same", but Starcraft II's engine for example, is simply phenomenal. Even though the engine is meant for RTS, it's already been modded to serve in FPS as well as top-down shooter! Through modding! And those are just unpolished tech demos!
For that matter, there's also the upcoming WoW expansion, Cataclysm that should hit the store shelves soon. This one doesn't actually seem all that promising to me, but let's talk about the 12 million subscription users anyway. Face it, even if all this expansion does is to maintain that user base, it's still going to print $$$ in the short term.
To me, this stock is definitely a hold if not a buy. If you if you love gaming stocks, this is definitely one of the top three to have.