MTV To Acquire 'Guitar Hero'

Aiming to boost its online properties, Viacom's MTV Networks has agreed to purchase Harmonix, the video game development house responsible for the popular "Guitar Hero," for $175 million.

MTV intends to incorporate features of Harmonix's break-out hit "Guitar Hero," as well as the popular game "Karaoke Revolution," into MTV Web sites--which will, for the first time, allow users to play online versions of these games. "Guitar Hero" lets gamers play out their rock star fantasies, even providing a full-sized guitar-shaped controller, while "Karaoke Revolution" transforms a gaming console into a karaoke machine. MTV also will develop game content based on classic songs.

"Guitar Hero," which appeals to a wide range of demographic groups, is a significant acquisition for MTV, said eMarketer analyst James Belcher. "'Guitar Hero' has been a big deal and is growing," he said. "It's not just for one age group; you can get songs that would appeal to a range of people."

While Harmonix is a relatively niche publisher, focused entirely on music-based games, its acquisition by Viacom signals that the company is focused on participating in the video game market, Belcher said. "It's not just this one-off property," he said. "This says they want to stay serious about games."

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Last month, MTV Networks said it had agreed to pay $200 million for Atom Entertainment, which owns four major units, including gaming sites Shockwave.com and AddictingGames.com.

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