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Will The Beatles threaten Activision Blizzard?

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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.

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Last updated: November 26, 2009: 01:17 AM

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