Rock Band publisher Electronic Arts has compared purchasing the game’s developer Harmonix, which parent company Viacom is currently peddling to potential buyers, to trying to “catch a falling knife.”
“I’m sure some smart investor will buy the business feeling that they can catch a falling knife,” said Chief Executive Officer John Riccitiello in an interview with finance site Bloomberg. “But more people have been cut trying to catch falling knives than have benefited from getting the timing exactly right.”
Ouch. Riccitiello’s comments seem pretty harsh, especially considering how much cash EA has reaped from the Boston-based developer’s musical endeavors, but there’s no denying the fervor for fake plastic guitars has cooled considerably, with sales of retail music games in the U.S. dropping fivefold since 2008. Not to say that music games are dead. Even though retail sales have declined, download sales have only increased. Add to that Rock Band‘s new keyboard functionality, and Dance Central‘s franchise potential, and Harmonix is still a developer more than worth acquiring, just possibly not at the price point Viacom is asking.
“There are probably 25 companies on our radar that would make sense for us at somewhere between 5 and 10 percent of the asking price, ” said Riccitiello. “We’re still out of favor…Moves that look like I’m doubling down on yesterday would make it harder still to convince investors that tomorrow is the Promised Land.”