Is licensed music in games a worthwhile investment for AAA releases. From the outside-looking-in it seems like an expensive hassle.

It depends a lot on the game and the music. There's a sliding scale of the importance of licensed music ranging from being core to the game on one end all the way to being a marketing flex that is otherwise unnecessary for the game itself on the other. Licensed music was one of the core elements that made Guitar Hero work. Licensed music added a huge amount of ambience to a game like GTA Vice City.

Games that use licensed music as a marketing flex types tend to be one of two categories - very large mainstream large franchises (e.g. Madden, Call of Duty, etc.) or big-budget games that are aiming to establish such a franchise. Licensed music is trying to appeal to the broadest audience possible by using widely-recognized artists. Call of Duty has used Eminem's music four separate times to promote their games (including one track 'Survival' that debuted with CoD: Ghosts) but the music generally has little to do with the game or the setting at all aside from just being cool. It works to grab attention, but yeah - it's expensive and can make things difficult later after the license expires.

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