Tag Archives: universal

Music games boomed in 2010 but 2011 could be much shakier

Music-related games saw an increase of 13.7% in sales last year to generate over £100m at retail, but wider forces could compromise its growth potential for this year.

Figures given to the BPI from GfK’s Chart Track reveal that platforms such as the Nintendo Wii, drove a large amount of sales (up 123% for the platform itself) in the gaming sector. The findings demonstrate that motion-based titles such as the Just Dance franchise were key to the market over the past year, arguably taking up the slack from the decline in peripheral-based titles such as Guitar Hero and Rock Band.

The uptake of PlayStation’s Move and Xbox 360’s Kinect motion-sensor technology are also, alongside Wii, helping create a new category of music-based gaming.

BPI chief executive Geoff Taylor said as labels diversified their revenue streams, licensing music into games titles had become a core part of digital business.

“Music is no longer a mere background feature in music games but a driving force behind their development and popularity. Motion-sensing has breathed new life into music games on consoles and record companies are finding new ways of engaging with fans through mobile and social gaming platforms,” he noted.

While the market performed well in 2010, events at the end of the year and the start of 2011 suggested the console gaming business was running out of rail.

And although there are a few marquee acts which are predicted to dominate this category in 2011, such as Ubisoft’s Blacked Eyes Peas Experience and the Glee-branded Music In Motion, the real boom is happening in social gaming, as Zynga’s IPO – which could value it at $1bn (£0.62bn) – illustrates all too obviously.

The company has managed to tap into a demographic which would never have previously considered themselves gamers, using Facebook to reach hundreds of millions of users.

However, the problem here, and it will become an increasingly larger one for labels and publishers as social gaming scoops up more and more users who will never engage with console games, is that music is pushed too far the side.

FarmVille dominates the genre and Zynga’s other major titles are primarily music-free. It did partner with Lady GaGa around her recent album launch, unlocking tracks and promotions during the campaign, however research by AllThingsDigital found the impact was fleeting – with user figures spiking around track unlocks but falling back when there was no activity on the site.

MXP4 has also recently moved into this area with its Bopler range of titles – and although these are all built on music, it remains to be seen what market and revenue impact they will have.

There have been moves by labels, notably EMI and Universal, to use social gaming to reach new audiences but they have tended to be used as marketing channels rather than adding in a commercial element to the equation.

This is the fundamental problem facing the sector; as social games piggyback on social networks, there is an inherent assumption from the users that – just like the social networks they use – they should be free at the point of entry.

There are monetisation routes of course, through options like virtual goods which even track and merchandise sales. But margins are becoming tight as organisations such as Facebook adapt their usage terms to insist that games developers go through the Facebook Credits payment system and hand over a 30% commissio.

Console gaming and its new motion-based future, spells good news for a handful of mega acts with enough fans for a developer to spend two years and millions of dollars building games around them.

And, for the rest of the acts, social gaming will grow in importance. But those hoping for a financial windfall for such titles will have a long wait ahead of them.

2010’s Top Ten titles in the UK (title/format/publisher):

1. Just Dance – Wii (Ubisoft)

2. Just Dance 2 – Wii (Ubisoft)

3. Michael Jackson: The Experience – Wii (Ubisoft)

4. Dance on Broadway – Wii (Ubisoft)

5. Dance Central – 360 (Microsoft)

6. The X Factor – Wii (Koch Media)

7. Guitar Hero: Warriors of Rock – 360 (Activision Blizzard)

8. We Sing: Encore – Wii (Nordic Games)

9. We Sing – Wii (Nordic Games)

10. Grease: The Official Video Game – Wii (505 Games)

Source: http://www.musicweek.com/story.asp?sectioncode=1&storycode=1045818&c=1

Mobile music slump holds back Warner Music Group’s digital growth

Well what a surprise that record labels are feeling the pinch on ringtone sales…maybe they should consider the ringtone model a little more carefully, with fans  creating ringtone content that is remixes of those fans favorite artists…oh I guess that’s what my company does! Warner, EMI, Universal Music and Sony, feel free to get in touch!

Major label Warner Music Group’s digital revenues grew by just 1.6% in Q4 last year, thanks to a slide in ringtone sales.

Warner Music Group reported its latest quarterly results yesterday, and they included yet more proof that the ringtones market has declined faster than expected.

WMG reported digital revenues of $187 million for the quarter, up just 1.6% year-on-year. “Our revenue growth in downloads and streaming services was more than offset by ongoing declines in ringtone revenue,” said chairman and CEO Edgar Bronfman Jr.

However, he said WMG is looking forward to new devices and digital services spurring renewed growth in this aspect of its business going forward.

“Digital innovation will evolve rapidly on many levels, including cloud-based music services, tablet launches, bundles subscription distribution, and connected devices,” said Bronfman.

“I think you’re going to see, I hope, very significant expansion of streaming services in 2011, and the introduction, I hope, of some very significant cloud-based services also in 2011.”

Bronfman was also asked directly about streaming music service Spotify, and while he batted back a question about whether WMG is any nearer to licensing the service in the US, he had warm words for its impact in Europe.

“We do see a very real growth from Spotify and we do see Spotify and services like Spotify as being ever more meaningful to our results, and I think you’ll be able to see that in our fiscal year 2011 and as the calendar year proceeds beyond that,” he said.

WMG’s overall revenues fell 14% year-on-year to $789 million in Q4, so despite digital’s sluggish growth, it now makes up 23.7% of the company’s total sales.