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In-Game Music Downloads a Hit

A hot new revenue stream for the recording industry is coming from video games.

"Rock Band," a game produced by MTV Networks and Harmonix, has sold more than 2.5 million add-on songs in the two months since its release. Players buy the extra songs online, according to a January 2008 Reuters report.

The other big play-along game, Activision's "Guitar Hero III: Legends of Rock," has sold more than 5 million new downloadable songs since early November.

"We live in a rough time around music where our audience struggles to pay $20 for a CD but don't hesitate to pay $50 for a game. The notion to pay 99 cents or $1.99 to have a song and repeatedly play with it apparently isn't a big hurdle," said Van Toffler, division president at MTVN Music Group/Logo/Films.

MTV said that the majority of the downloaded songs were purchased by Xbox 360—not PlayStation 3—users. "Rock Band" sold 775,000 copies for the Xbox 360 through the end of 2007, compared with 250,000 on the PS3, according to the NPD Group.

Other video game publishers are looking at distributing downloadable music as well. Such technology would let gamers replace their soundtracks every few months after the initial release.

"That's certainly something we're interested in," said Steve Schnur, worldwide head of music at Electronic Arts. [eMarketer]

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