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Music Videogames' Relationship with Music Business Might Fall Apart

12:21 p.m. · February 24, 2009 · by Andrew Winistorfer

Ever since the music business realized that music videogames were the only market their product was showing growth in, they began complaining about not making enough money off them, arguing over contracts that they signed wholeheartedly when no one thought anyone would shell out for a game where you play faux guitar.

Wired has a story looking at the arguments between the music business and music game makers, mostly hinging on licensing fees. The music business says that they're not paid enough, while the music game makers say that they're paid equal to other games like Madden. 

Game publishers generally sign low-cost synchronization licenses—as if the music were being used incidentally, in the background. Compare this to Electronic Arts' Madden NFL franchise, from which the football league collects some 30 percent of gross revenue, and you can begin to feel his pain.

So, essentially, music companies signed contracts similar to the music that is just background noise on other games, when the music is the actual draw for music games.

Wired contributing editor Jeff Howe lays a lot of the blame at Warner Brother's head Edgar Bronfman, who is the most vocal detractor, and discuss where improvements could be made for both sides. Read the story here. 

But given that music games' sales have topped out, things could get worse, as music game makers might be less inclined to increase licensing fees when their bottom lines are less robust. It seems like the music business is setting itself up for another symbiotic relationship with a business model that is less than perfect (like CD sales).