[.Falk]

It's complicated. Often there's more than one entity at work when you license music for games.

Usually, you negotiate with the record label or publisher, for a usage license, to use music in a game or movie soundtrack.

Game music where keysounds are necessary, on the other hand is special because it requires the original multitracks, and thus it also involves the recording studio that produced the music. (Record studios rarely give out the multitracks to record labels - you pay for a painting, not the canvas/palette - or another analogy being Transformers getting permission to use XYZ model vehicles in the movies is different from Honda or Fiat or whatever handing over the vehicle designs/blueprints)

In some cases, depending on how the original deal between record label and studio went when producing the album/single, those may be completely out of bounds - Record studios and producers may sometimes have a beef with their individual sounds or samples being reused and are protective of their multitracks.

Considering the fact that it's a giant leap of faith to let anyone else have access to the multitracks (which is miles different from a license to just use the final song) sometimes record labels themselves may not see the reason to provide them.

Other times the music you want to license may be so old that the multis just don't exist anymore. I'm still baffled as to how some of the stuff in Guitar Hero was obtained. Seriously.

In these cases, it's often up to the game developer/sound engineers to come up with workarounds or approximations. An example of this being done very well is O2Jam's license of Seo Tai Ji's music, especially the ones that (at the time known as) Kaze.o2SE (re)produced in O2Jam's format. He worked with the final CD cuts and recorded his own tracks on top of it, then re-mixed.

I helped O2Jam Indo do a couple of pop song remakes as well. I'm not too sure of the exact deal they had with the artistes, but basically what I understood was they had permission to use (a likeness of) those songs in their service, but couldn't obtain the multi's. I got an online acquaintance to record live guitars because he had the sound I wanted, sequenced the drums, recorded the bass, and we were good to go. Ain't Internet an awesome thing. :V

In the context of Band Master, where individual instruments seem to be the highlight, the result doesn't seem anywhere near as pretty. Compare the vid I linked to the original JerryC Canon Rock, for example. Augh.