Music biz wakes up to boom in music-based games

By Antony Bruno

DENVER (Billboard) - Kerstin Murphy won't be quitting her day job. Microphone in hand, she tries her best to belt out a karaoke rendition of Hoobastank's "The Reason" while her friends at a dinner party in Denver cringe in glee at the cheesy lyrics and her unsuccessful efforts to hit the high notes.

"OK, your turn," she says defiantly, handing the mic to her fiance once the song is over.

The group is playing "SingStar Pop," a karaoke game from Sony's PlayStation division through which players can score points by hitting the right notes, at the right time, while singing along to one of 36 songs -- complete with music videos.

"SingStar Pop" is just the latest release in the ultra-popular music-centric videogame genre. And the music industry is taking notice.

"It's the beginning of this being a channel for the distribution of music, and an important one," said George White, senior vice president of strategy and product development at Warner Music Group (WMG). "It's one of the few places we've seen in the sweet spot of what consumers want to do with music today, which is interact with it."

'GUITAR' BREAKTHROUGH

Since the original "PaRappa the Rapper" in Japan, music-based games have carved out a unique niche in the videogame industry. But until lately, the genre has not enjoyed mainstream success.

"Guitar Hero" changed everything. Created by pioneering music game developer Harmonix, "Guitar Hero" was published by the unknown RedOctane with virtually no budget for marketing or music licensing, and required a custom game controller shaped like a guitar that resulted in a bulky, expensive package.

"Any rational analysis told us there was no way this game could be successful," said Alex Rigopulos, co-founder and CEO of Harmonix.

Yet "Guitar Hero" has sold more than 1 million units since its November 2005 launch, considered a massive hit for a music-based game. The November 2006 sequel, "Guitar Hero II," has done even better, with 2 million sales so far. The bundled package of both games was the fifth-best-selling game of 2006 across all platforms, according to data from retail market research firm NPD.

The "Guitar Hero" phenomenon shows that a well-developed music game featuring mainstream songs could have a mass-market appeal, and the music industry wants in.

Of particular interest is the new generation of game consoles, which through their Internet-access capabilities and downloadable content services will enable gamers to buy new songs to add to the games.

"It becomes much more interesting when you're not tied down to the 20 songs selected for you by the developer and instead you have a library to choose from," WMG's White says. "That's going to be the fundamental transformational thing."

Already, the Xbox 360 version of "Guitar Hero II" allows users to buy and download three-track bundles of new songs for the game. The upcoming PlayStation 3 version of "SingStar Pop" will launch this fall with an online library of hundreds of tracks called the SingStore, where gamers can buy and download the music of their choice.

QUESTIONS ARISE