Rock is back — and the data backs it up. According to Luminate’s 2025 Year-End Report, rock was the fastest-growing genre in the US last year, gaining more market share than any other category, with Apple Music emerging as its biggest platform. Vinyl posted its 18th consecutive year of growth, hitting $1.4B in revenue and outselling CDs for the third straight year. The Oasis reunion tour, the second-highest-grossing of 2025 per Pollstar (grossing $405M and drawing over two million attendees), drove a 690% spike in the band’s Spotify streams. Artists like Yungblud, who landed three consecutive No. 1 UK albums are explicitly positioning guitar-driven music as something new and exciting for Gen Z, not a nostalgia trip.
Against this backdrop, music games are stirring again. Multiple well-funded teams are building new games — not clones of each other, but fundamentally different products for different audiences. The 2026 landscape includes a new plastic guitar game from the original Guitar Hero creators, a music learning mode inside the world’s biggest education app, and open-source community projects that never stopped growing. The genre hasn’t looked this active since the mid-2000s.
But every one of these products faces the same underlying constraint that has shaped (and repeatedly killed) music games for two decades: licensing. Understanding who pays that bill (and how) explains not just the genre’s past collapses but which of the current bets have a real shot at lasting, and why the category is worth watching.
The Setlist Problem
A music game’s core content is the IP it doesn’t own. The setlist drives marketability, fuels the “be a rock star” aspiration, and keeps players coming back. However, every song requires two separate negotiations: a sync license for the composition and a master license for the recording. Commercial sync licenses in the U.S. average $15,000-$50,000 per song, with classic hits commanding a 2-3x multiplier. A competitive launch catalog of 50-100 recognizable songs can cost millions before a single unit is sold.
A great setlist alone isn’t enough; innovative gameplay, visual polish, and the right platform all matter. This tension between creative ambition and licensing economics defines the genre — and as we covered last year, it’s why so few titles have made it work at scale. What’s new in 2026 is the specificity of the bets being placed and the caliber of the teams placing them.
Only two games have made it work with any long-term consistency. Just Dance (€1B+ in lifetime consumer spending, 80M+ copies, 140M+ players) dominates the dance category with no meaningful competition. Beat Saber (approaching 10 million units sold on Quest alone as of January 2025, with 200+ official DLC songs) owns VR rhythm gaming outright. Both succeeded by holding near-monopoly positions in their niches, not by solving the licensing equation. For everyone else, the setlist problem remains the defining challenge, and three very different approaches are emerging in response.
The Return of the Plastic Guitar
The original Guitar Hero and Rock Band era didn’t collapse because of licensing alone. The audience fatigued on a premium model — $70 every six months plus expensive peripherals — while publishers oversaturated the market with multiple releases annually. The cultural moment passed. Guitar Hero Live’s 2015 attempt at a revival was critically praised but commercially unsuccessful; it introduced a redesigned six-button controller that required players to essentially relearn the instrument, shrinking the accessible audience rather than growing it. Its live service streaming mode (GHTV) shut down in December 2018, locking 500+ songs behind dead servers.
A decade later, the conditions look meaningfully different. Fortnite Festival has been an important, if imperfect, proof of concept.
Fortnite Festival (developed by Harmonix, the Rock Band studio acquired by Epic in 2021) launched in December 2023, grafting a rhythm mode onto Fortnite’s 110M+ MAU's player base. It’s free-to-play, with extra songs at ~$4.50 each or via a seasonal Music Pass (~$18). Third-party hardware followed: the CRKD Neo S controller in November 2024 and a Gibson Les Paul peripheral in June 2025.
Fortnite Festival proved there’s demand for rhythm gaming inside a massive player base. But two years in, it has struggled to serve that demand. According to Fortnite.gg tracking data, Festival’s concurrent player count now sits below 10,000 CCU, roughly 30-40x lower than Battle Royale’s average, with spikes only at season launches. Persistent latency and calibration issues have frustrated the community. The March 2025 shop restructure removed roughly 90% of purchasable tracks in favor of a rotating “curated” selection, while new releases shifted from weekly to a “flexible schedule.” Players called the changes “anti-consumer,” arguing that songs have real gameplay value — they aren’t cosmetics. The closure of Battle Mode and deep discounts on official Festival guitars come alongside Epic’s recent layoff news. Community creators increasingly point to free open-source alternatives like YARG and Clone Hero as delivering a better core experience.
Announced in February 2026 by RedOctane Games — the original Guitar Hero founders, now under Embracer Freemode — Stage Tour is co-developed with Third Kind Games, a studio founded by ex-FreeStyleGames veterans (the team behind DJ Hero and Guitar Hero Live). In August 2025, RedOctane recruited EliteAsian, the creator of YARG, along with four core contributors. The result is arguably the deepest concentration of plastic-guitar genre expertise ever assembled: the original hardware creators, the developers behind the series’ most ambitious entries, and the community builders who kept the scene alive through a decade of commercial dormancy.
Stage Tour, targeting Holiday 2026, launches with Gibson/Epiphone/Kramer hardware from day one, a five-fret note highway, full band support, and an explicit long-term platform philosophy: “StageTour is not built to be replaced. It is built to evolve.” Where Festival skews toward Fortnite’s existing audience, Stage Tour is targeting a different crowd: Guitar Hero veterans and dedicated rhythm game fans who’ve been underserved for nearly a decade. Whether the live service economics — licensing bills sustained by an ongoing install base rather than a hardware launch spike — prove durable is the central question. Guitar Hero Live is the cautionary precedent. But the developer pedigree and community credibility are meaningfully stronger than anything the genre has seen since its peak.
Music Games on Mobile
On mobile, the landscape splits between casual and core.
The Magic Tiles franchise (Amanotes), a tap-based rhythm game set to classical compositions and original music, is one of the most-downloaded mobile games ever (Sensor Tower has Magic Tiles 3 alone approaching 1 billion installs), with a licensing footprint that stays deliberately light. Similarly the Geometry Dash series (by RobTop Games) proved music-adjacent mobile gaming could scale massively without licensing recognizable tracks at all. These games demonstrate that musical gameplay on mobile can reach enormous audiences even if the licensing burden stays minimal.
Beatstar (originally by Space Ape Games, which was acquired by Supercell) tried something harder: a fully licensed catalogue rhythm game on mobile. It worked, with over 100M downloads and nearly $200M in lifetime revenue, strong enough to justify spinning the team into an independent studio, NextBeat. NextBeat CEO Simon Hade’s plan was to launch genre-specific variants (Country Star was the first).
Then, in August 2025, Duolingo acquired the entire 23-person NextBeat team, the company’s largest acquisition by headcount and its first outside language learning. The games weren’t part of the deal, and Beatstar’s servers shut down in October 2025. The factors behind the closure likely include the rising cost of mobile user acquisition. Hade himself cited the difficulty of launching new mobile games as a factor in the pivot, compounded by a licensed catalogue whose costs scale with every addition but whose per-song economics don’t.
Learning to Play
As we covered when the Duolingo deal was announced, Duolingo’s interest in the NextBeat team points somewhere entirely different. CEO Luis von Ahn named music as a “next user growth engine” for 2026 alongside chess and math. Duolingo closed 2025 with 50M daily active users and over $1B in bookings for the first time. At that scale, even a small percentage trying music lessons represents a larger audience than most standalone music education apps have ever reached.
Music education apps are already a proven market. Simply Piano’s parent company JoyTunes hit $100M in annual revenue and a $1B valuation in 2020-2021. Yousician reached ~$50M in revenue with 20M MAUs. Fender Play surged to over 1M subscribers during COVID. These are real businesses, but none of them operate at Duolingo’s scale.
Duolingo Music’s licensing exposure is also fundamentally different. The current course leans on folk classics and public domain material; curriculum scaffolding — such as scales, theory, and technique exercises — keeps users engaged without requiring a deep library of licensed hits. Songs become a reward layer, not the core product. There’s no blanket educational exemption under U.S. copyright law (Rocksmith+ licenses songs the same way rhythm games do), but reduced dependence on a deep licensed catalogue changes the economics substantially. Whether Duolingo’s bite-sized habit-loop model translates to an activity that has traditionally required sustained, focused practice remains the central open question.
The UGC Wildcard
One model sidesteps the licensing question almost entirely: let users make the content.
Beat Saber launched in 2018 with an original soundtrack — no recognizable pop tracks at all. It proved the gameplay alone could sell millions in VR, with licensed DLC following once the audience was established. But alongside the official catalog, a parallel user-generated economy emerged. Community-hosted maps on BeastSaber and BeatSaver now number in the tens of thousands, covering virtually any song a player might want.
Clone Hero, a free open-source Guitar Hero clone, has survived a decade on community content alone. YARG built a following passionate enough to get its creator recruited by RedOctane. HiFi Rush (Tango Gameworks, 2023) proved rhythm mechanics could travel into entirely new genres: it reached 3 million players by August 2023 and earned a Metacritic score of 87, though the studio’s subsequent closure by Microsoft is a reminder that commercial fragility can follow even critical hits. Undeterred, Dead as Disco, another much-hyped rhythm-action beat-’em-up currently in development, is positioning itself as a “UGC mosh pit ready for modding.”
The legal reality of UGC is worth acknowledging. The vast majority of custom maps in Beat Saber’s community and Clone Hero use copyrighted music from signed artists. Technically, distributing copyrighted recordings without a license is infringement. But no major rights holders have pursued legal action at scale, likely because the communities are non-commercial, relatively niche, and arguably drive engagement with the artists’ music. It’s an uneasy equilibrium that AI auto-charting tools are making more complex: when generating a map for any song takes seconds instead of hours, the volume of potential infringement grows accordingly, but it also unleashes the potential for more novel creative songs to play with.
Where This Goes
The music games market has branched into distinct segments: peripheral-driven console games, mobile touchscreen games, educational apps, and UGC communities. Each serves different players on different platforms with different session lengths and with different relationships to licensed music. These segments aren’t truly in competition; a rising cultural tide around rock and live music could lift several winners at once.
Stage Tour is the most watched bet for 2026: the genre’s deepest bench of veterans, launching into a genuine cultural resurgence, backed by a community that kept the scene alive through a decade of commercial absence. Duolingo is the most interesting long-term play; its platform operates at a scale the rest of its category simply can’t match. Fortnite Festival’s trajectory looks increasingly clear: consistent decline in dedicated player engagement suggests it will settle as a feature within Fortnite’s broader ecosystem rather than a destination in its own right, unless Epic makes a stronger commitment to the core gameplay issues rhythm game veterans have flagged since launch.
The setlist problem hasn’t gone away. But for the first time in a decade, there are enough different approaches — and enough cultural momentum — that the genre doesn’t need a single solution. It needs several — and it might finally have them. Rock on.
A Word from Our Sponsor: Overwolf
Integrate Safe UGC Into Your Game with CurseForge for Studios
Overwolf is an all-in-one platform that lets creators build, share, and monetize in-game apps, mods, and private servers. With over 178K creators and 113M monthly active users, Overwolf supports the world’s most popular AAA titles such as League of Legends, Minecraft, World of Warcraft, and 1,500 other games.
For game developers, Overwolf offers CurseForge For Studios. CurseForge For Studios is a white-label solution that allows game makers and publishers to integrate mods safely and seamlessly into their games, both existing and new, at zero cost. It’s battle-tested by AAA studios and games, including Krafton (inZOI), Studio Wildcard (ARK), Take-Two Interactive (KSP), and others.
CurseForge For Studios offers:
- Cross-Platform Modding: Integrate Overwolf’s open-source SDK and plugins to let players discover and install mods in-game, across all platforms and storefronts.
- Moderation to Ensure Safety: Studios define policies and guidelines on what is permitted, with Overwolf ensuring that only authorized and appropriate content is published.
- Creator Relations and Payments: CurseForge supports creators with monthly payments, equity investments, developer contests, and hackathons to kickstart content creation for your game.
- Harness Existing Creator Community: Tap into the creative expertise and knowledge of a passionate community of 178K creators.
- Premium Mods Integration: Crafted by game studios and select community modders, Premium Mods offer players a next-level modding experience through guaranteed high-quality content, while offering creators a powerful new revenue stream.
In Other News
💸 Funding & Acquisitions:
- Rockfish Games lands €8M grant as Germany boosts game industry support.
- Saudi Arabia raises Capcom stake to 6.04%.
- US-based on-chain chess platform Pixie Chess has raised $5.2M in Seed funding.
- Sony to acquire AI and computer vision company Cinemersive Labs.
- South Korea-based games developer Shift Up has acquired Japan-based games studio Unbound for an undisclosed sum.
- UAE Ministry of Culture opens fifth cycle of national grant programme.
📊 Business & Products:
- It Takes Two, Split Fiction studio tops 50M sales.
- The Division Resurgence makes $717K in first seven days.
- Playtika launches portfolio-wide strategic review.
- Direct-to-consumer sales hit record levels again in Q4.
- Selfless spending, linked accounts and how developers get the most out of Discord.
👾 Miscellaneous:
- India’s LVL Zero incubator unveils first cohort of 10 games startups.
- New matchmaking platform Sail.game launches to combat "discovery fatigue" between developers and publishers.
- Netflix launches dedicated app for kids games.
- Codfish Academy partners with Dear Villagers to launch game pitching clinic in Portugal.
- Super Mario Galaxy Movie becomes highest grossing debut of 2026 in the U.S.
Content Worth Consuming
Aream & Co. Q1 2026 Video Game Market Update (aream.co): “The Aream & Co. Q1 2026 Video Game Market Update key highlights include: M&A value reached $7.7B across 52 transactions, led by Savvy's $6B acquisition of Moonton and Scopely's $1B purchase of Loom Games; Public capital offerings remained subdued at $1.0B across 11 deals amid broader macroeconomic headwinds and AI-driven market rotation; Private investments totalled $0.8B across 101 deals, with early-stage activity sinking to just 43 deals — its deepest level in recent years; PC gaming on Steam set new all-time highs in quarterly revenue ($5.6B) and peak concurrent users (42.7M), sustaining double-digit growth (+12% YoY LTM); Console revenue hit a record $21.7B, powered by the Nintendo Switch 2 hardware cycle; Mobile IAP spend held steady at ~$20B for the third consecutive quarter, while download volumes hit multi-year lows.”
The Rise, Fall, and Resurgence of Australian Game Development (gamesindustry.biz): “The Australian games industry has been on a real roller-coaster ride over the past couple of decades. The country had built up some big studios like Pandemic, Krome, Blue Tongue, 2K Australia, and Team Bondi, but after the 2008 global financial crash, around 60% of Australia's game development sector disappeared over the course of four years. ‘The entire industry was wiped out,’ recalls Sanatana Mishra, co-founder of Unpacking maker Witch Beam, who saw many talented developers leave the industry entirely. ‘My design mentor who taught me everything I know went back to being a sparky [electrician]. Most of my coworkers who were excellent at what they did left for America and joined companies like Blizzard. We saw a brain drain on a level that was unimaginable.’”
Top 5 Advanced Ad Placements by Jakub Remiar (two & a half gamers YouTube Channel): “In this solo episode of Two and a Half Gamers, Jakub breaks down 5 advanced ad placements that are actively driving revenue in top mobile games. No theory. No fluff. Just practical systems you can implement today.”
The AI Industry’s Existential Race for Profits (Decoder with Nilay Patel): “Today, let’s talk about the looming AI monetization cliff, and whether some of the biggest companies in space can become real, profitable businesses before they careen right off it. My guest today is Hayden Field, who’s our senior AI reporter here at The Verge. She’s been keeping close tabs on both Anthropic and OpenAI, and how these two companies, both slate to go public this year, tell us a whole lot about the AI industry in 2026.”
2026 Trends and Specific Predictions (Gamecraft Podcast): “Blake and Mitch return! They begin with a discussion of the "Great Inflection" in software in the last several months. They then do some follow-up to last season, particularly their "deadpool" episode that turned out to be way too kind to the companies they profiled. The hosts then "draft" six trends that were visible in 2025 that they think will continue and define 2026, alternating picks. Remarkably, they don't pick overlapping trends despite choosing blind and not disclosing pre-show. Finally, they each offer three specific predictions for 2026.”
Supercell CEO Ilkka Paananen on a 25-year Career in Mobile Gaming (pocketgamer.biz): “Ilkka Paananen has built an illustrious career in gaming. He’s most famous as the CEO of Supercell, whose teams have built globally successful games from Clash of Clans, Hay Day and Boom Beach to Clash Royale and Brawl Stars. He’s now being awarded the BAFTA Fellowship, an accolade that celebrates individuals for achievements across their career in the screen arts. He joins a list that includes industry luminaries like Hideo Kojima, Shuhei Yoshida, Siobhan Reddy, Gabe Newell, Yoko Shimomura and Shigeru Miyamoto, among others. The latter’s work at Nintendo has been a key inspiration on Supercell’s mantra of building games that will be remembered forever.”
More About Naavik
Naavik's team of experts has helped over 300 companies — publishers, studios, tech companies, and investors — better succeed across the video game industry. We'd love to work with you too! Here's what we offer, spanning all platforms, genres, and regions:
- Strategy Consulting: Projects covering market research, corporate strategy, game & economy design, gamification, live ops strategy, AI strategy, product management, brand & performance marketing, and more.
- M&A and Investment Advisory: Expert commercial due diligence for buyers, fundraising support for sellers, and fractional CFO/CSO services.
- Fractional Talent: The one-stop shop for top-tier fractional talent covering dozens of game industry roles (analytics, design, marketing, art, QA, and more).
Check out the links above for more details. And if you'd like to chat about how Naavik can serve your team, click the box below or send us a note at [email protected].
