• by Wayne Friedman , Staff Writer, November 12, 2010

 

 

Wonder why media companies get lured in by the video gaming business? Just look at Activision, which racked up sales of "Call of Duty: Black Ops" to a very big number indeed -- $360 million -- in a single day.

No, this wasn't only the biggest one-day sales figure ever for video games; this was the record for any entertainment release -- theatrical release, TV, pay-per-view whatever.

So you can see why a media company like Viacom can get lured into the mix -- not that other don't feel the same pull.

Viacom had the high-flying "Rock Band" video game brand, which doesn't rock so hard any more. On the same day of the "Call of Duty" release, Viacom announced a major loss -- some $299 million -- from the discontinued operations of its Harmonix game division, which includes "Rock Band." Blame it on the whipsaw effect of the modern entertainment consumer. Viacom also said it would be selling Harmonix.

Worst still, when virtually every other major TV-centric media company is recording sizable increases in net profits, along with big advertising revenue gains, Viacom's third quarter 2010 results look like a black eye -- a 59% decline in net income.

Viacom did see 8% gain in its TV advertising revenues. But its gaming division was the real headline.

Who would disagree that spreading one's portfolio isn't a good idea?

Not one of Viacom's competitors need to be smirking about troubled non-TV areas. News Corp. is still suffering losses from the quick rise-and-fall of MySpace; Walt Disney's theme parks are still a bit troubled.

It gets worst for those TV-centric media companies who stay away -- when trying to convince themselves that gaming is mostly a one-off business. The new "Call of Duty" grabbed the new record from -- who else -- itself. It beat "Call of Duty: Modern Warfare 2"'s $310 million revenue grab in 24 hours in 2009.