Viacom sells Rock Band game maker Harmonix to investment firm
Viacom Inc. has found an unlikely buyer for Harmonix Music Systems, the creator of its Rock Band video games.
The media giant announced Thursday that it had sold the Cambridge, Mass.-based Harmonix to Columbus Nova, a private investment firm in New York.
Terms of the deal were not disclosed, but several analysts said the price was probably less than $100 million, significantly less than Viacom paid to acquire the development studio in 2006. One person familiar with the matter but not authorized to speak about it for attribution said Viacom wanted to sell Harmonix by Dec. 31 to improve its tax position in the current year.
“It would be a win even if they gave it away, between the tax benefit of selling it for a loss combined with the fact that the business was losing money,” said Rich Greenfield, an analyst at Pali Research.
The media conglomerate failed to turn a profit on any of the Rock Band games released between 2007 and 2009 and has more recently been facing a rapid decline in consumer interest for music video games.
In November, Viacom disclosed that it was trying to sell Harmonix.
Columbus Nova declined to discuss its plans for the game studio or whether its top management had equity positions in the newly private company.
“Columbus Nova is really excited about backing the world-class team that has consistently produced such great games and helping them grow the company and its brands,” the investment firm said in a statement.
Viacom spent $175 million to buy Harmonix in 2006 and agreed to pay more based on its financial performance in 2007 and 2008. After initially giving the development studio’s former owners $150 million for 2007 performance, Viacom is now attempting to get some of that money back.
It is in the midst of a legal battle with former Harmonix shareholders. Through a proxy, the shareholders contend that they are owed hundreds of millions more in performance-based payments.
This year Harmonix released Rock Band 3 as well as Dance Central, a well-received dancing game for Microsoft’s motion-sensing Kinect device.
