The DJ Is in the House at Activision

Why should rockers have all the fun at Activision Blizzard (Nasdaq: ATVI  ) ?

Viacom's (NYSE: VIA  ) MTV News is confirming that the video gaming giant behind the Guitar Hero franchise is working on a disc jockey mashup game called DJ Hero. The title, likely due out next summer, features a turntable controller where gamers can scratch and mix a collection of dance, rap, and even rock hits.

The move makes sense, as Activision tries to raise the bar after Viacom itself one-upped Activision last year with Rock Band. Viacom's entry -- distributed by Electronic Arts (Nasdaq: ERTS  ) -- enhanced the guitar fret controllers by introducing drums and vocals into the rhythmic gameplay. Activision plans to match Viacom with its upcoming Guitar Hero: World Tour release, but this obviously doesn't end there.

Konami's (NYSE: KNM  ) Rock Revolution hits stores next week. The initial instinct may be to dismiss Konami as another coattail rider, but that would be dangerous. Konami practically created the niche with its Guitar Freaks game and set the rhythmic game standard with its Dance Dance Revolution.

The challenge for Activision, according to the unnamed MTV News source, is securing song licensing rights. The major labels have been clamoring for a bigger piece of the action since Guitar Hero and Rock Band exploded onto the scene.

"The amount being paid to the music industry -- even though their games are entirely dependent on the content we own and control -- is far too small," Warner Music Group (NYSE: WMG  ) CEO Edgar Bronfman Jr. said during last month's quarterly conference call.

I disagree, especially given how the presence of catalog titles in new games reawakens digital download sales, but developers may not want to anger the major labels like Warner or Sony (NYSE: SNE  ) . As tempting as it may be to score garage band points by opening up the submission process to unknown bands, the games ultimately draw fans of specific artists on the soundtrack.

Thankfully for Activision, its merger with Vivendi's Blizzard Entertainment puts it on the same wavelength as Vivendi's Universal Music Group. The game may suffer if it limits itself to just one major label for content, but the jury is still out on DJ Hero's chances even if had every major artist on board.

Do folks really want to man virtual turntables to make beats and scratches? Isn't the club-hopper set too aged and jaded to make DJ Hero a hit? The key here will be marketing the game as an enhancement to Guitar Hero, making it a "must have" accessory for faux guitar strummers. If so, it's just a matter of time before Viacom and even a kid-friendly Disney (NYSE: DIS  ) turntable video game come out.

For Activision shareholders' sake, let's hope the company is just starting to scratch the surface.

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Longtime Fool contributor Rick Munarriz can hear The Smiths singing "Kill the DJ" at the notion of a DJ-based game. Rick does not own shares in any of the companies in this story, save for Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it could beat Jordan in Expert mode if it had to.


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  • Report this Comment On October 20, 2008, at 7:46 PM, jones3d wrote:

    7 studios in Santa Monica was developing this, project is canned for now, laid off a bunch of people.

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