What Does the Facebook Acquisition of Beat Saber Mean?

Bob, Forbes writer Charlie Fink and HP's Head of VR Joanna Popper at IAAPA

Bob, Forbes columnist Charlie Fink and HP’s head of VR Joanna Popper at IAAPA

At the IAAPA show in Orlando last month, one of the breakout hits of the show was Beat Saber by VRsenal. They sold more than 50 units during the 4-days of the show to arcades from around the world. (If you missed it and want more info, check out my blog post here. And if you’re interested, drop me a reply and I will get you a special deal.)

Facebook announced this week that it’s acquiring Beat Games, the studio behind the smash-hit Beat Saber. I’ve received several emails from operators who recently purchased VRsenal’s Beat Saber game at IAAPA, asking what this means to them?

For those that don’t know, Beat Saber is probably the most popular VR game to date. In naming it Game of the Year, the Verge called it “Star Wars meets Guitar Hero in VR.”

It was created by a small team in the Czech Republic led by CEO and Music Mixer Jaroslav Beck. It’s become the most successful VR game with more than a million downloads generating over $20 million in revenue.

That makes it not just the biggest VR games success story but also the biggest indie games success story on any platform of the past year,” Tipatat Chennavasin, a co-founder of The VR Fund and an advisor to Beat Games, told TechCrunch in an email interview.

In its official announcement (read it here), Facebook wrote:

“Beat Games will continue to ship content and updates for Beat Saber across all supported platforms, now with even more support from Facebook.”

What kind of support might that entail? Beyond cash and marketing resources, Facebook’s leverage with the music industry has the power to guarantee the long-term success of Beat Saber.

Beat Saber has generated over 2 Billion Views on YouTube, thanks for the company’s support of streamers, and a modding feature enabling users to create games from almost any song. The company also recently announced expansion packs from two of the most popular bands in the world, Imagine Dragons and Panic and the Disco. Keeping the music fresh seems one of their core success strategies.

If you study the history of music rhythm games, this is the correct strategy. Guitar Hero, one of the most profitable game franchises in history, generated sales of more than $2 Billion. It featured songs from the most celebrated bands in history. It’s successor, Rock Band, featured a dedicated version featuring the music of The Beatles. This continual stream of music from popular acts led to a decade-long run.

Licensing major hit music is where Beat Games’ business gets complicated. Having worked at Ecast, one of the digital music pioneers in the early 2000’s, I have a decade of experience with licensing digital music. To say it’s complex is oversimplifying things. Facebook will make Beat Game’s life so much easier.

Facebook’s relationship with the music industry has evolved in the last decade. Since they reached a licensing deal with Universal Music Group in December 2017, they have been licensing rights for Facebook users to include licensed music clips in their uploaded videos.

“We are enabling billions of users to be the music supervisor for their life story,” says IMG_6676, Facebook’s global head of label partnerships, noting how Facebook and Instagram Stories can now be easily set to music in-app.

So what’s in it for Facebook? Zuckerberg wants to get 1 billion people into VR. They’ve just released the most consumer-friendly VR product to date – the Oculus Quest. Every gaming platform needs a system seller. Might Beat Saber be that game? Tipatat went on in his interview to add. “Angry Bird’s success on iOS helped legitimize smartphones as a gaming platform when it made $6 million in one year.” Beat Saber is legitimizing VR as a gaming platform. But beyond that, it could even justify the hardware purchase of headsets.

Guitar Hero and Rock Band taxed players with the need to purchase large, expensive custom controllers, including guitars and even a drum kit. The games were so appealing consumers lined up at stores, forking over as much as $400 for The Beatles version. With Quest costing $399, Facebook sees Beat Saber as a game that might be popular enough to overcome the tax of purchasing a headset.

Facebook’s relationship with artists and labels will give Beat Games an incredible advantage when licensing new content for Beat Saber. The longevity, or legs as we call it, of any music game is only as strong as it’s music catalog. With Facebook committing to Beat Saber, the future of the game is solid. Expect to be playing Beat Saber featuring music by your favorite artists for years to come.

One note about the location-based VR versions of Beat Saber: Licensing music for the out-of-home market, or “public performance” as it’s called, is even MORE complex that licensing music for the consumer market. Three components need licenses for each song.

The music label licenses the musical performance (the actual recording).
The publisher licenses the musical composition (The notes and lyrics).
The right to perform in public is licensing by a performing rights society like ASCAP.

When a song is used to directly generate revenue, like an arcade game or jukebox, every stakeholder in the value chain: the band and its management, the songwriters, the label, and the publishers, all must give permission. This can be time consuming and expensive. I point this out for those of you looking at or using Beat Saber in an arcade. Just because music is available for home use, doesn’t mean it is licensed for out-of-home use. Be patient; it can take some time.

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