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Last week, when MTV Networks announced they had struck a deal with Apple Corps to create a "dedicated, custom" music game based on the music of the Beatles, many considered it to be the biggest blow yet to major music game competitor Activision. Now Reuters is reporting (via Gamasutra) that Activision and MTV were courting rights holders Apple Corps, Sony/ATV Music Publishing, and EMI Music Group for almost a year, but Activision's desire to pay less in royalties may have killed their chance at some kind of a deal.

"It was presented as if they were doing the music business a favor," said Sony/ATV CEO Martin Bandier of their negotiations with the game publishing behemoth. Referring to the impact music games have on album sales, he added, "It's true you can choose other types of music, and somewhere along the line someone's going to do it for free for the exposure...[but] when it comes to the Beatles, the leverage changes."

While the final deal may have been mostly decided upon by royalty rates, MTV's success in the music business couldn't have hurt, nor the fact that they were the first ones to create the full-band experience, for that matter. "MTV was clearly the innovator in offering a full-band experience," said Apple Corps CEO Jeff Jones. Hey Jones, don't forget about Rock Band developer Harmonix. They might've had something to do with it as well!