Rock Band 4 Failures Lead to Massive Loss for Publisher Mad Catz

By | 5 months ago 

Mad Catz reveals that Rock Band 4 proved to be a disappointment financially, with the publisher turning in a heavy loss on the back of the game’s poor performance.

The Rock Band franchise was once one of the most lauded intellectual properties in gaming. Along with fellow music title Guitar Hero, the rhythm-based band sim had near limitless potential during the last console generation, with a string of hugely successful titles. However, it seems as though Rock Band 4 has not followed in the path of its predecessors, and instead has become a commercial failure.

Because of this, publisher Mad Catz is certainly feeling the pinch. Although there was a lot of excitement for the release of the game, and high hopes around from both the publisher and developer Harmonix, Rock Band 4 has not delivered on its potential. The end result has made for grim reading, with Mad Catz turning the previously year’s profit of $4.7 million into a loss of $11.6 million.

To make matters worse, Mad Catz already had a lot riding on the success of Rock Band 4. At the start of the fiscal year, the publisher’s earnings fell below the threshold that was demanded by creditor Wells Fargo, and the publisher’s response pointed primarily at Rock Band 4 to provide an uplift for the company. Harmonix, too, heavily invested in Rock Band 4, raising $15 million in equity in advance of the game’s release.

Rock Band 4 - Freestyle Guitar

The end result, though, was not what either party was looking for. Mad Catz has incurred $6.8 million in write-downs of Rock Band 4 inventory, lost a huge amount in stock value, cut 40% of its staff in an attempt to lower costs, and had its co-publishing agreement with Harmonix terminated. It seems that even the the long-awaited online multiplayer functionality would not be able to save the title.

Rock Band 4 may have been a disappointment financially but the game performed fairly well at a critical level. The title was praised for its devotion to party-based gameplay, although there was criticism over a lack of content. Post-release, however, the title was mired in controversy, first through some major issues at launch and eventually through the admission by Harmonix that employees had been posting positive reviews of the game on Amazon.

Just what this means for Mad Catz or Harmonix going forward remains to be seen, but the failure of the game is hardly positive news for either party. The publisher’s CEO Karen McGinnis has tried to put a positive spin on the termination of the agreement regarding Rock Band 4, stating that it allows the company to focus on the development and execution of “other exciting and profitable product launches.” However, it’s never easy for a company to bounce back from such a financial disaster, no matter what it has in the pipeline.

Rock Band 4 is out now for Xbox One and PS4.

Source: Games Industry