Keynote Interview from MIT VC Conference: 'Guitar Hero' creator Eran Egozy

At today's MIT Venture Capital conference, I had the fun task of conducting an on-stage interview with Eran Egozy, co-founder and CTO of Harmonix Music Systems, the Cambridge company that brought you 'Guitar Hero' and 'Rock Band' (as well as earlier music-oriented games like 'Frequency' and 'Karaoke Revolution').

We had a chance to talk about the creation of the company; some of their early attempts to license technology they'd developed and create a hit game; how they raised $10 million in funding from angel investors and VCs; how they almost ran out of money before their 'C' round; what made 'Guitar Hero' a hit; the company's acquisition by MTV for $175 million (in cash); what's next; and why there will never be a game called 'Clarinet Hero.'

The MP3 file is here; it includes Q&A, and is about 30 minutes long.

News Tidbits to Start the Week: Authoria, SpaceClaim, Visible Measures

- Authoria, a SaaS survivor of the dot-com blow-out, is being acquired by a private equity firm for $63.1 million. Waltham-based Authoria sells "talent management solutions"; the buyer is Bedford Funding, which will agree to put in another $8 million in working capital.

Not sure, but this company seems to have undergone a recapitalization at some point...[ Update: they recapped in 2004 ] they raised $75 million in one round back in 2000, but none of those investors are still on the board. The most recent round was $22.5 million last fall. Amazingly, Tod Loofbourrow has stuck it out as the company's CEO for more than a decade.

- General Catalyst portfolio company Visible Measures announced a big deal today to provide video measurement services to all of MTV Networks' properties.

- SpaceClaim founder Mike Payne mentioned to me earlier this month that Chris Randles, formerly CEO at MathSoft, was taking over the CEO reins at the Concord-based maker of computer modeling software. Randles had been serving as an entrepreneur-in-residence at Borealis Ventures, one of the VC firms that has backed SpaceClaim. The official announcement, apparently, happens later this week. Payne had served as CEO until this spring.

3D CAD news reported back in January that there had been some lay-offs at the start-up... and that the COO had departed.

'Guitar Hero III' vs. 'Rock Band': The Game Genre Harmonix Invented

Cambridge-based Harmonix gave birth to the newly-hot genre of music-based videogames, and this morning the NY Times has a story on the two latest releases: 'Rock Band,' from Harmonix and its parent company, MTV, and 'Guitar Hero III,' from Activision. In just one week, 'Guitar Hero III' (the franchise was launched by Harmonix, but is now the property of Activision) raked in $115 million in sales.

From Robert Levine's piece in the Times:

The rivalry between MTV and Activision is made more stark in that both Rock Band and the previous versions of Guitar Hero were developed by Harmonix Music Systems (the newest Guitar Hero was developed by another studio).

MTV purchased Harmonix in September 2006 for $175 million cash, in a deal that did not include rights to the Guitar Hero franchise. To distribute Rock Band, it signed a deal with Activision’s main competitor, Electronic Arts.

Like any battle of the bands, this one features its share of trash talk.

“MTV trying to take on Guitar Hero is like us trying to go into the music cable business,” [Activision chairman Robert] Kotick said. One of the largest video game makers, Activision is enjoying its best year ever, because of Guitar Hero II, several successful movie tie-ins and the latest entry in the action game Call of Duty.