MUSIC GAMES HIT BAD NOTE
Video-game executives cheering for an encore of last Christmas’ consumer rush on pricey music titles “Rock Band” and “Guitar Hero” may be in for a disappointment this year.
Analysts warn that sales of “Rock Band 2” and “Guitar Hero: World Tour,” this year’s versions of the hit franchises, are looking soft in the early days of their availability. Both games hit stores in the wake of the September credit crisis.
“The genre is doing OK, but. . . it needs to pick up in order to not disappoint,” UBS analyst Ben Schacter said yesterday in a note to investors.
Many industry watchers view the music category as a key driver of video-game sales over Christmas.
“Not only do music-genre titles appeal to a broad set of consumers (both hardcore and casual), but their higher average selling prices continue to be a key driver of overall industry software dollar growth,” Schacter added.
Music games this year have accounted for close to 40 percent of the industry’s revenue growth, he said.
The red flag comes as the industry grows more worried that the once-bulletproof video-game industry is increasingly vulnerable to a weakening economy.
Electronic Arts, the distributor of “Rock Band,” earlier this week warned of a wider full-year loss and announced that it will slash its work force by 6 percent amid a slowdown in sales.
“We’re not saying the sky is falling. . . [but] there are indicators consumers are being more cautious,” EA CEO John Riccitiello told analysts Thursday, noting that the company has seen a slowdown at retail in October.
Earlier this week Schacter expressed similar concerns about Activision’s “Guitar Hero: World Tour,” noting that first-day sales of the game, which was released last Sunday, were a “mixed bag.”
“The guitar-only version of the game seems to have shipped in much larger quantities and does not appear to be selling well at this time,” he said. “Similarly, the game-only version of the title is not selling well, according to our checks.”
Wall Street appeared to be hearing the same thing Friday, as shares in Electronic Arts, off 45 percent in the past eight weeks, closed down 17.9 percent, or $4.95, to $22.78 yesterday.
Activision shares, down 28 percent since the beginning of September, dropped 1.9 percent, or 25 cents, to $12.46.
Bundled interactive music games are big-ticket items, even by video-game standards.
The full-band kits of both “Guitar Hero” and “Rock Band” – packages that include the software and instrument-shaped controllers – cost as much as $190. brian.garrity@nypost.com