The new generation of Rock Band on console gaming was more than just a flop, it was a financial disaster for Harmonix and their co-publisher Mad Catz. Originally intended to resurge the musical game genre through Xbox One, the revenue initially showed some promise. But towards after the turn of the year for Mad Catz, the $4.7 million profit from Rock Band 4’s performance quickly dived into an $11.6 million loss.
The peripheral makers at Mad Catz ultimately lost another $6.8 million for Rock Band 4 write-downs, material authorizations, and retailer price reductions. Not only that, but a significant loss in upper management and nearly 40% of the company’s staff. According to GamesIndustry.biz, CEO Karen McGinnis made a statement regarding the decline in their investor conference call.
“We removed excess layers of management to make the organization more nimble. We merged our U.S. based creative marketing functions into our product development team in the UK, consolidated European inventory and distribution into our UK operations, outsourced our customer service function and closed our Mad Catz branded eCommerce sites. We voluntarily delisted from the Toronto Stock Exchange as the small trading volume did not justify its ongoing listing fees and legal expenses. We have also started to more effectively manage our marketing spend by focusing on targeted consumer marketing and significantly reducing and in some cases eliminating our partnership and presence at industry trade shows.”
Harmonix has terminated the co-publishing agreement with Mad Catz, ordering them to sell the $8,3 million Rock Band 4 inventory before September 6, 2016. The loss was an understandably an incredible disappointment to Mad Catz.
Meanwhile, Harmonix prepares for the upcoming holiday season and have their sites set on a new horizon. In light of cutting ties with Mad Catz, the company has instead signed up a new agreement with Performance Designed Products. Rock Band games are ensured to continue, now with PDP game accessories instead of the former Mad Catz peripherals.
Along with PDP, the Rock Band makers have signed up for a long-term commitment with their already established partnership in Fender. Polygon.com reports that Mark Van Vleet of Fender gave a press release concerning the recently signed, decade-long contract:
“We are pleased to continue our successful relationship with Harmonix. Harmonix continues to impress us with their attention to detail and precision in faithfully recreating our classic instruments.”
Steve Janiak, CEO of Harmonix also shared his excitement with the ongoing partnership. “I’m thrilled that [Fender will] continue to be a part of Rock Band well into our next decade,” he said. Their new teaser video today reveals that they are ready for the next verse in Rock Band’s development. Now, Fender, PDP, and Harmonix continue on without Mad Catz, bringing more content and gameplay to Rock Band 4 new instruments as well as updates that will bring online multiplayer to the game. Some of which is expected to be announced at E3 and released later this year.
Mad Catz hopes to recover from the large hit to stocks and revenue by focusing their efforts on “the development and execution of our other exciting and profitable product launches” according to McGinnis.
