With a little help from my friends

VIACOM and the video game industry are hoping they will get more than a little help from the Beatles.

When the Beatles: Rock Band hits stores tomorrow, Viacom is betting that the new title from its MTV unit will end a slump in the market and vindicate the company's expensive and unprofitable entry into the music video game business.

The new game applies the simulated rock star experience that many are familiar with from other Rock Band games and Activision Blizzard Guitar Hero and brings in the Beatles, who have never before appeared in a video game.

It comes at a crucial time for the industry as sales of music game videos have plunged 46% in the United States this year, according to NPD Group.

Viacom will pay Beatles rights holders an unprecedented amount to include the band members' songs and likenesses in the video game.

It has guaranteed them a minimum of around $14 million and will shell out royalties of $58 million or more if the game sells as expected, according to three people familiar with the terms of the deal.

"The royalty rates on this are not even comparable to anything that has been done before," said Martin Bandier, chairman of Sony-ATV Music Publishing, a joint venture of Sony and Michael Jackson's estate, which controls the publishing rights to most of the Beatles' catalogue.

Others who will benefit from the game include Apple Corps, which represents Paul McCartney, Ringo Starr and the estates of John Lennon and George Harrison, plus EMI Music, owner of their recordings.

Guitar Hero pioneered the music video game genre in 2005 and remains the top seller.

Its seven major entries have sold a total of 34.2 million units around the world.

And its publisher, Activision, is hardly letting up.

Four new Guitar Hero games will debut in coming months, including a hip-hop spin-off called DJ Hero and a family-friendly version called Band Hero.

Although MTV is offering a limited edition of the Beatles: Rock Band with instruments based on ones used by the band, it costs $360, $100 more than the equivalent version of Rock Band 2, dollar-conscious consumers who do not already have instrument controllers will probably be attracted to a "value bundle" that uses controllers from the original Rock Band game.

The marketing material for Beatles: Rock Band urges consumers to use Guitar Hero controllers, enabling Viacom to piggyback on its more successful rival.

"Our core competency is media," said Paul DeGooyer, senior vice-president of electronic games and music for MTV Games.

"Let [Activision] take on the burden of getting those super-tight margin instruments out there."

Bobby Kotick, chief executive of Activision, said his company was more than happy to sell controllers to the Beatles: Rock Band players, as it has increased the efficiency of manufacturing them this year and earns a profit on them.

Kotick expects that the Beatles game, for which his company made a presentation to the rights holders but never formally bid, is going to be a "big launch."

But he said Activision would compete on two fronts.

Guitar Hero 5, which comes out on September 18, emphasises value, offering 85 songs and a free copy of Guitar Hero Van Halen, due here early next year.

It will cost the same price - $89 - as the Beatles: Rock Band, which ships with 45 songs.

DJ Hero and Band Hero, meanwhile, feature music that has not had much presence in music games previously.

"So far we have only delivered classic rock, so we're going out with a much broader product offering," Kotick said.

MTV's marketing blitz, significantly bigger than for any previous Rock Band game, will initially focus on the most avid gamers, who are likely to buy on day one, when it goes on sale along with a remastered version of the band's catalogue.

As Christmas approaches, advertising will aim at non-gamers who may be drawn by the appeal of the band.

"We are expecting this game to be a top-five title by the end of the year," Guthrie said.

Based on initial orders by retailers, he predicted that Viacom would have recouped its production costs and minimum guarantee to the Beatles rights holder on the first day of sales.

Beatles: Rock Band's success, however, will not come from store sales alone.

In a clear bid to wring more revenue from the property, Viacom is holding back several of the band's best-known albums, such as Abbey Road and Sgt.

Pepper's Lonely Hearts Club Band, to be downloaded.

Consumers who want to play those albums in the game will have to pay as much as $US17 for each. - Ben Fritz.

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