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Analyst: Guitar Hero Vs. Rock Band, The Showdown

Just ahead of Activision's fiscal results announcement, and in the wake of the release of Guitar Hero III Citigroup analyst Brent Thill breaks down the Guitar Hero vs. Rock Band battle set to go down this Holiday season in retail -- a
Just ahead of Activision's fiscal results announcement, and in the wake of the release of Guitar Hero III, Citigroup analyst Brent Thill admits, "we tirelessly spent a week getting our licks in perfecting our face-melting solos." In that vein, the analyst details the firm's take on the title, weighing in on the upcoming Guitar Hero vs. Rock Band battle set to go down this Holiday season in retail. After giving Guitar Hero III a test-drive -- for market research purposes, of course, Thill concluded: "We are not overly concerned that EA's/MTV Games’ Rock Band will galvanize Activision’s GH3 opportunity this Holiday season, because in terms of gameplay, the two are not direct competitors." He continued: "In addition, GH is a proven franchise with over 4M units sold, while Rock Band is unproven, Rock Band will not have an international presence, Rock Band’s $170 bundled price point is nearly double the price of GH (and can be up to 3x as much by adding additional peripherals), and Rock Band is likely to be sold out at most retailers for the next six months, which will likely have many gamers grabbing GH3 off the shelves instead." "Activision has a big hit on its hands," says Thill, and states, "We are confident GH will be a $1 billion franchise for Activision, and with the potential for in-game advertising, sponsorships, downloadable content, Activision has barely scratched the surface with the music/rhythm genre." Thill also expects the franchise to add more instruments for the next installment "...at a higher price point, of course," he adds, pointing out that Activision has recently patented the name "Drum Villain." He also expects, given evidence the music/rhythm genre is "bridging the gender gap," that it might not be too farfetched to envision "Pop Hero", "Rap Hero", "Techno Hero" and "Dance Hero" from Activision sometime in the future. Recalling the guitar peripheral supply constraints that caused difficulty for the franchise's earlier installments, Thill says, "Importantly we believe Activision has secured enough peripherals to ensure GH3 is not supply constrained this Holiday season," leading to, as the analyst cites, estimated GH3 sales of 6.7 million units(2.2M Xbox 360, 2M PS2, 1.8M Wii, 700k PS3) -- thus far the franchise has sold 5 million units to date. [UPDATE: Attribution of Guitar Hero III sales data clarified.]

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