EA Wants to Be a Rock Star

Electronic Arts (Nasdaq: ERTS  ) is apparently eager for a slice of the success that the musical video game Guitar Hero has achieved. It's teaming up with Viacom's (NYSE: VIA  ) MTV and Harmonix, the creator of Guitar Hero, to make its own version of an interactive musical game, called Rock Band.

Of course, anybody who knows about the video game companies probably knows that Guitar Hero, in which players simulate playing guitar in well-known songs, racking up points for their accuracy, is actually an Activision (Nasdaq: ATVI  ) game. So it appears that Electronic Arts isn't being particularly creative, although the truth is, it's adding some solid differentiations in its own spin on the rock-and-roll fantasy.

For example, as is made obvious by the title Rock Band, the game not only involves guitar but simulates a complete "band" with two guitars, a singer, and a drummer, therefore being a collaborative game. It will use online connectivity so "bandmates" from different geographic locations can get together to jam for points. (Note that Guitar Hero II allows collaborative playing, adding bass and rhythm guitar players to the lead guitar.) Furthermore, MTV has helped EA negotiate with the major music companies, so that the game will feature original songs. In Guitar Hero, most of the songs featured were covers or by lesser-known bands.

Apparently EMI and Warner (NYSE: WMG  ) have pledged "unrivaled access" to their catalogs for Rock Band. Labels from these and the other music majors, Sony's (NYSE: SNE  ) BMG and Vivendi's (NYSE: V  ) Universal Music, have also agreed to make master recordings available. It's a win for the music companies to gain exposure to video game fans and music junkies, and notable perhaps that the industry is getting ideas for more interesting channels for exposure and revenues. (The interesting connection between music and the video game industry was recently emphasized by EA's joint venture with label Nettwerk.)

Rock Band is expected to release in time for the 2007 holiday season for Sony's PlayStation 3 and Microsoft's (Nasdaq: MSFT  ) Xbox 360. (I'm sure another major question for many investors is: So what about Nintendo's Wii?)  

Some gamers (and video game investors) have wished EA and Activision would get a bit more creative instead of relying on rehashes. That's a good point, and I can't say this isn't a good example of the dilemma -- after all, it's riskier to spend money to develop a creative new game idea that might not fly with gamers at all. However, it sounds like EA's Rock Band shows promise of improving upon its rival's Guitar Hero game play, and for that reason, it might be forgiven for being a new spin on an existing idea -- it sounds like it could be a real hit.

Electronic Arts, Nintendo, and Activision are Motley Fool Stock Advisor picks. Microsoft is a Motley Fool Inside Value selection. A free 30-day trial to either newsletter will be music to your portfolio.  

Alyce Lomax does not own shares of any of the companies mentioned, but wonders if the air guitar will make a comeback. The Fool's disclosure policy is a streetwalking cheetah with a heart full of napalm.


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