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Viacom Selling Rock Band Maker Harmonix; Profits Fall On Writedowns

Viacom (NYSE: VIA) has had enough of falling sales for gaming brand Rock Band and so the company has decided to sell its maker, Harmonix. The announcement was made in conjunction with Viacom’s Q3 earnings report, which apart from a $299 million writedown related to Harmonix, a classified “discontinued operation,” the media company otherwise had pretty good performance.

Last February, Viacom asked for a refund on its 2007 earnout payment to the game developer’s founders. In October 2006, Viacom subsidiary MTV Networks paid Harmonix $175 million plus earnouts based on its performance in 2007 and 2008. It’s not clear how much Viacom is seeking to offload Harmonix. While the gaming slump has hurt the once-valuable Rock Band franchise, MTVN has not given up on the space. In fact, this past summer, MTVN acquired developer Social Express to continue to build up Nickelodeon Digital’s offerings.

Despite the trouble with Rock Band, revenues at the Media Networks business, which houses cable nets, was up 8 percent in domestic advertising revenues and 10 percent growth in worldwide affiliate fees. Overall revenues were partially offset by lower profits in the Filmed Entertainment segment due to the timing and mix of theatrical releases.