Just Play

Last November, Harmonix introduced Rock Band (this time the guitar is a faux Fender Stratocaster), adding to the ensemble a drum kit and an optional bass guitar and vocals (the game can tell if you are singing on pitch). It is another monster hit, selling more than 3.5 million units so far at a list price of $169, a stratospheric amount for a home video game. Viacom now owns Rock Band; Harmonix's founders sold their company in 2006 for $175 million, with the possibility of another $200 million in earn-outs. Harmonix still operates autonomously, in Cambridge, Massachusetts, with bigger budgets for product development and marketing and concerts by the legends of rock.

It all easily might never have happened. "We were on the brink of death, I don't know, 10 times over those 10 years," Rigopulos says. Harmonix missed the cash gusher of the Internet bubble almost entirely while it pursued ideas that bombed miserably, one after another. In 1999, the year an online pet store fronted by a sock puppet raised $50 million, Harmonix was laying off staff. Its founders sometimes give the impression of still being a bit shaken. Last year, when fawning organizers of a video game conference asked Rigopulos to give a speech about "living the dream," he wistfully marked up a PowerPoint chart of Harmonix's annual profits and losses. He labeled the company's breakout year, 2006, as "The Dream." The years 1995 through 2005, shown almost entirely in red ink, were "The Part Before That."

Tokyo Big Sight is a sprawling exhibition hall on the man-made island of Odaiba in Tokyo Bay. In mid-1999, Rigopulos and Egozy were inside at the annual Karaoke Festa trade show, watching their dream die again. They had decided a year earlier that the pot of gold for Harmonix was in Japanese karaoke. So they had leased a costly branch office in Tokyo and put their company's meager cash resources toward developing contacts in the industry. Now, here they were, in the booth of karaoke company Daiichikosho, exhibiting next to a vendor whose product made it possible to order French fries and soda through a karaoke machine. Rigopulos and Egozy thought their gizmo was cooler: a computer joystick glommed onto a real guitar and wired to a karaoke player. Using the joystick, a person could improvise music that sounded like a guitar, while another person sang a popular tune. (The guitar was purely for show, and the joystick jutting out of it when people wore the guitar looked perverse.)

In the booth, they watched as businesspeople politely tried out their invention, nodded, and moved on to test the French fry system. Nobody was having much fun. The smiles seemed forced. Toward the end of the show, Egozy looked around and couldn't find his business partner. Rigopulos was gone. He had realized before Egozy that their idea was doomed and had gone back to the hotel. Karaoke in Japan had nothing to do with improvising a guitar performance, and it wasn't going to. It was another year wasted. About $7 million of investors' money was gone.

It was time to rewrite the business plan again.

Rigopulos calls the early years at Harmonix "the dark ages." For four years, they were making no money, he says. "And to be clear, I don't mean we were earning no money. I mean we had near zero revenue. We were raising money and spending it, building stuff that no one actually wanted to pay for."

They were obsessed with an idea. It started with "Growing Music From Seeds: Parametric Generation and Control of Seed-Based Music for Interactive Composition and Performance," Rigopulos's 80-page master's thesis in 1994 at MIT's Media Lab. The paper had something to do with encoding the essence of music into software.

Rigopulos had grown up outside Boston, messing around with computers and playing drums in a Led Zeppelin/Pink Floyd cover band. As an undergraduate at MIT, he majored in music and co-founded a Balinese percussion orchestra. For his graduate studies, he was assigned to share an office with Egozy, who was a year behind him. Egozy, 36, is a gifted computer scientist, a T-shirt-and-sneakers guy with wire-frame glasses and a grin that seems to say I just changed your grades on the school computer. His family had moved to the U.S. from Israel when he was 12. He is a virtuosic clarinetist who plays in a classical ensemble (though he admits the first album he bought was Van Halen's 1984). The two prodigies clicked.

Some of their peers were working on sophisticated "hyperinstruments" -- hot-rodded cellos and violins and such; one project involved putting computer sensors all over Yo-Yo Ma's cello. "We were interested in the other 99.9999 percent of the population who aren't expert musicians," Rigopulos says.

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