According to the Wall-Street Journal [subscription required], Viacom's third-quarter earnings fell 59 percent on write-downs at the developer but overall revenues and income from other operations increased more than analysts predicted.
The process of "writing-down" an asset means that Viacom willingly reduces the book value of Harmonix because it has become overvalued as compared to its own market value. In order to make this adjustment, Viacom must first reclassify Harmonix as a "discontinued operation." To prepare for this change, Viacom adjusted its third-quarter financials to already account for the sale of the developer and, in doing so, sustained a loss of $299 million.
"I am sure that the purchase price of $175 million is in there--it would have been carried on Viacom's balance sheet as goodwill," Wedbush Morgan analyst Michael Pachter told Joystiq, explaining the "discontinued operation" situation. "The rest could be other operations (non-gaming), some portion of the earn out that they paid a couple of years ago, which should have been expensed, but you never know, or some portion of the development costs for games not yet released."