The struggling music video game business has a lot riding on the success of Beatles Rock Band.

“Roll up for the Magical Mystery Tour. Step right this way,” cried Paul McCartney during the catchy song’s introduction. But for the video game business, Beatles Rock Band isn’t simply about magic and mystery. It’s about massive money spent in a time of recession. And it’s about the biggest earner in video game software—music-based games—being hit exceptionally hard in the past year. There’s a glut of very similar music games and expensive bundles that include the plastic instruments necessary to play.

This year, music games are no longer the must-have item. To understand how much is riding on Beatles Rock Band for Viacom/MTV (VIA.B), the publisher; Electronic Arts (ERTS), the distributor; and all the retail outlets, you have to grasp the astronomical budget for the game. When asked whether Beatles Rock Band was budgeted as a relatively cheap video game at around $25 million or as a very expensive game a la Grand Theft Auto IV, for which $100 million was reportedly spent, MTV Games Senior Vice President Robert Picunko said, “It falls much closer to the latter.” So in this industry, no one wants Beatles Rock Band to underperform, so much so that almost every executive and analyst interviewed was somewhat nervous about speaking about its release. Harmonix, the game’s creator, declined comment, citing employee travel for the game’s premiere as the reason

The extraordinary expense includes the making of the game; the licensing of songs; and the marketing, which includes cross-promotions on all of Viacom’s cable networks at the same time: 9 a.m. and 9 p.m. on 9/9/09. It also includes an expensive commercial in which the Abbey Road-era Beatles are seen cavorting with the kids and hipsters of today, a Pepsi co-promotion for free songs under bottle caps, an Apple Corps co-promotion with the rerelease of a Beatles mono box set, and a charity effort with Microsoft (MSFT) that gives the proceeds coming from the downloadable version of “All You Need Is Love” to Doctors Without Borders.

More dramatically, it includes massive payments to Paul McCartney and Ringo Starr, along with the spouses and estates of deceased Beatles George Harrison and John Lennon. According to the Los Angeles Times, the game cost Viacom $10 million in payouts to those who hold the rights of Beatles songs even before the game was released. If sales go according to plan, the people who own the songs, mainly Sony (SNE) and Michael Jackson’s estate, could be paid as much as $40 million in royalties.

It won’t be easy for Viacom to recoup its investment. Music-based video games have seen a huge dip in sales this year—huge, no matter who’s counting. Researchers at the NPD Group say the genre has fallen by 46 percent year to date. And the Rock Band franchise has cost Viacom tons of money. Three years ago, it paid $175 million to buy Harmonix, the savvy developer of rhythm-based music games, beginning with FreQuency for the PlayStation 2 in late 2001. In 2008, Viacom paid another $150 million to Harmonix as a bonus for meeting and surpassing contractual sales projections. (The first popular music game was Sony’s quirky Parappa the Rapper for the original PlayStation in 1996). Nonetheless, high production costs and dipping sales of the Rock Band series brought the operating margin of Viacom's MTV Networks from 39 percent down to 35 percent.

MTV’s Picunko has worked in video game marketing since the original Mortal Kombat was released. He predicts that sales will be brisk because many video gamers already have the instruments from previous music-game purchases; all they will need is $60 for the video game software. He says that the $250 limited-edition bundle with the replica of Starr’s drums and a plastic version of McCartney’s signature Hofner bass will be for collectors primarily. Finally, Picunko notes that Viacom has sold more than 50 million songs for the Rock Band series and believes that the release of downloadable versions of Abbey Road in October and Rubber Soul in November at $17 each is a bargain that includes not only the songs but almost endless gameplay (especially if you try to beat the game on the very difficult “expert mode”).