It didn't take long for the recently merged Activision and Blizzard Entertainment to make some interesting strategic moves. They recently announced a plan to launch a new digital music store to compete with iTunes. Wait, aren't these two companies in the gaming business?
As we have seen, many of the recent blockbuster game titles have been music-focused. Rock Band and Dance Dance Revolution have been major hits over the past couple of years. Activision Blizzard's Guitar Hero is the hottest selling game over the past year and has shown to dramatically affect sales of songs included in the game. For example, the chart below (or in the extended post) shows the impact that the GH3 launch had on digital sales of songs in the game (chart courtesy of Ars Technica). Not only did song sales make a dramatic leap, that leap continued to grow and sales remained high even weeks after the launch of the game.
An interesting demographic metric is that the average age of gamers has grown to 35 years old. Things certainly have changed over the past twenty years. Grown-up 35 year-old adults are driving the gaming industry. But wait it gets better. 40% of these gamers are women.
What's interesting about this demographic information is that it's the same demographic that buys music online. We know kids and teenagers aren't buying their music. But for most of the 30+ group, buying music is still a normal thing and thus represent a great opportunity for Activision Blizzard to create a new business around music sales.
Activision Blizzard isn't the only gaming company mixing in a music business. EA has recently started their own music label called Artwerk. Gaming companies have been sourcing game soundtracks from independent artists and when it's included in a popular game, often times the soundtrack becomes popular as well. Now, EA wants to be able to reap the benefits of these tracks, as I'm sure many other game publishers will do very shortly as well.
It remains to be seen how successful Activision Blizzard's new music store will be. It certainly has built a solid relationship with people in the right target demographic.
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