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Activision Dissolves  Guitar Hero  Business, Refocuses On Digital
Activision Dissolves Guitar Hero Business, Refocuses On Digital
February 9, 2011 | By Leigh Alexander

February 9, 2011 | By Leigh Alexander
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The Guitar Hero series is finished, at least for now, with no game forthcoming for 2011 and its business unit to be disbanded, publisher Activision Blizzard announced today -- citing declines in the music genre and a desire to focus on higher-margin opportunities in the online space.

Activision's axe didn't stop with the once-thriving Guitar Hero franchise. The company also terminated open world game True Crime: Hong Kong, in development by Vancouver-based United Front Games.

"These decisions are based on the desire to focus on the greatest opportunities that the company currently has to create the world's best interactive entertainment experiences," said Activision in a statement alongside its quarterly and annual fiscal 2010 results.

Signs of trouble first surfaced for True Crime: Hong Kong when its original fall 2010 release was pushed back at summer's end into the vague "next year" window, due to what the publisher said were quality issues.

At the time, it was one of the few core titles on Activision's slate in development by an external studio, a strategy it rarely pursues.

Activision says it will "invest its capital and resources in the significant opportunities afforded by online gaming worldwide and will reduce its exposure to low-margin and low-potential businesses," and that the cancellation of the game is part of that plan.

This means that in the year to come it will concentrate on Blizzard's online games, the Call of Duty brand -- and plans to build a "best-in-class digital community" around it, as well as Bungie's upcoming project in development.

The company says it also plans to reveal an "innovative new universe" at Toy Fair later this week which it claims will "bring the world of toys, video games and the Internet together in an unprecedented way."

"These investments should better position Activision Blizzard for long-term growth and enable it to continue expanding its position as the largest digital publisher," the company concludes.

Activision has not yet, however, commented on a widely-cited report from Eurogamer that -- while correctly predicting the Guitar Hero cancellation prior to the company's announcement -- originated the layoffs speculation.

Neither has the company confirmed widespread rumors of concurrent layoffs at developer Vicarious Visions, which worked on Guitar Hero, nor at DJ Hero house Freestyle Games.

[UPDATE: In a SEC filing, Activision announced that, due to a refocusing and "anticipation of a continuing weak environment for casual and music-based games", the plan will result in the layoff of approximately 500 employees, resulting in "a net pre-tax charge in the first two quarters of 2011, which is expected to total between $35 and $50 million, comprised of severance costs, the costs of other separation benefits and other exit costs."]

But the writing has been on the wall for some time regarding developers of peripheral-equipped music games and the massively-reduced opportunity the genre now enjoys. Viacom sold band game developer Harmonix as Rock Band revenues contracted, and that studio recently saw layoffs.


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Comments


Jason Pineo
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True Crime: Hong Kong canceled? *Now*!? Why now? That game deserves to be released. Hopefully there's a way they can go with another publisher or something.

Lo Pan
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This is a shocker. To let True Crime to get this close/far into production and then to cancel it during its final beta stage makes me wonder about the project management quality at ATVI. Hard questions need to be asked internally.

Jason Pineo
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Perhaps they should. But they won't.

Lo Pan
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Your right. :-)

Rafael Brown
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Umm, no, they can't. Fairly simple situation. Activision owns the True Crime IP having bought it when they bought Luxoflux a number of years back (creators of True Crime: Streets of LA and True Crime: New York City). United Front would have no more rights to the IP than you would to Call of Duty if Activision had you work on Call of Duty 15: Calling More Duty and then canceled your Call of Duty game...

R G
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May be simple or naive to say, but I'm boycotting them. My money is going to be insignificant in the long run, but I can be proud knowing I'm not a sheep buying every CoD.



Again, like in the Section 8 article, where is our middleware? Releasing these games creates games other than high budget AAA games, which isn't healthy for our industry.



But hey, when you have legions upon legions of players who will buy anything marked Call Of Duty, why would Activision care about such trivial things?



Feel free to flame me by the way.

Rey Samonte
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Legions upon legions buying CoD...didn't Guitar Hero have that kind of following too? It makes me wonder, when Activision says they are moving towards a leaner direction, how much leaner can you get with only Blizzard games and CoD?

R G
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Right...and what happens when gamers don't want CoD anymore? Granted, that may happen a long time from now but it is still a possibility.



But then again...weren't we all stating how unstoppable Guitar Hero was a few years back?

Jason Bentley
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Amazing how annualizing products to maximize short term profits results in long term brand over-saturation.



It's almost like they decided that making $2 today was more important than making $100 in a week.

Justin LeGrande
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@Mr. Gill

I think Medal of Honor is a good example of what happens. At this rate, history will repeat itself...!

R G
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Yeah, agree with you there. Though, I think EA is going to be careful with MoH and actually attempt to innovate on it. Or not.



I've been meaning to say this for some time....but does anybody else feel as though we're stumbling in the dark sometimes? I'm speaking as a developer.



A few years ago, I could get excited about games coming out, where the industry was going, etc... It's almost as if we have devs who really make something different, and than we have a clone of yesteryear's game come out year after year that is lauded by media. I'll let you think of which game.



I don't know now. I know I'm pretty much ranting at this point and I'll be surprised if anybody is reading this far, but I grow weary of where we are... So many AAA games that we can't just CREATE something. We have to have that multi-million dollar franchise seller/starter or it's not worth having.



I know that not all of us are like that, but I fear that are kind are slowly and slowly just being thrown out or disregarded.



Rant is over, I promise.

Luke Skywalker
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Let's not forget Bungie's deal with ATVI.

Jerry Hall
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I hope the 500 laid off workers find jobs. Good luck my friends.

Justin LeGrande
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Seems like a convenient time to say this... and please tell me if this is inappropriate!



To me, Mr. Robert Kotick's relationship with Activision reminds me of a possible relationship between an overprotective parent and a stymied child. The parent does everything in their power to bar the freedom of their child, trying to take away what the child wants. What the child does not fully realize is that the parent is providing what they need to survive, and the security to feel safe. Paradoxically, the child personally feels less safe while protected than when vulnerable. In frustration, the child overexerts their self, and faces the consequences.



Mr. Kotick saved Activision from death almost 20 years ago. He wouldn't just let his child come to harm then, and he wouldn't now. That actually sounds quite admirable. Until you find out the child is his stocks, and not his fellow workers. Tussling with a papa bear wouldn't end well for anyone, though.

Jeff Zugale
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This has affected all the people I used to work with at 7 Studios, who got folded into Activision as a result of the DJ Hero vs. Scratch Ultimate DJ dustup a while back. 30 good, earnest, skilled and talented people out of work. Deepest sympathies, 7 folks... hang in there, you'll land on your feet soon!

Jamie Mann
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Wow. So long Guitar Hero. You flog a horse to the point of death, then you flog it some more and you're surprised when it dies (and then, all you can think about is rendering it down for glue). Way to go Activision.



It'll be interesting to see how things play out going forward. On a vaguely positive note: this may mean that Rock Band has a chance to grow it's revenues again, now that the market is no longer so heavily saturated - and some of the previously GH-exclusive acts may now become available on RB.



Also: Guitar Hero was one of the biggest users of the DLC "micropayment" model: people could extend the game by buying additional, individual songs. So what happens now? Aside from the fact (or at least assumption) that no more songs will be published, what happens to the existing DLC. Can Activision just withdraw them once the revenue trickle dries up (12-18 months), or is there something in the contract barring them from doing so?

Rob Wright
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Good point, Jamie.



The Guitar Hero brand is like Jeff Bridges' horse at the end of "True Grit." I guess the only difference is that Activision management seems genuinely surprised that its horse couldn't continue to take a beating. And by beating, I mean churning out weak titles every six months and oversaturating the brand.

benn rice
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music is not a fad, therefore music games are not a fad. what's a fad is redoing the exact same KIND of music game over and over again.



the next generation should help you build melodic skills instead of regressing any that you might currently possess.

it should be alot more like playing real music, instead of ruining your groove by failing you,

and not letting you learn the music until you've played it right,

not letting you get partial credit for hitting long notes just cuz you missed the beginning,

not letting you play outside of the predetermined note patterns.....



i made such a game, and its different from Rock Band 3's Pro Mode.



you can play the ENTIRE game for free if you like.



http://PlayRealNotes.com

Benjamin Marchand
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The more I'm reading ATVI business strategies, the more I have nausea.



Every time I think they hit the bottom of the barrel with those vulgar, broad decisions, they just prove me they can go even deeper.

Rob Wright
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I think it should be obvious at this point that the current "big publisher" business model, despite the occasional and noteable successes, doesn't work. Publishers like EA, Activision and Microsoft have spent the last decade plus buying up hot independent developers with strong-selling IP/franchises, and this approach has shown to have very little long-term viability or staying power. Just look at how Microsoft spun off Bungie and Viacom sold Harmonix -- we're right back where we started. The 2000s are littered with the carcasses of once great development houses, from Westwood Studios to now RedOctane, that made outstanding titles on their own but wilted and bled talent once they became part of a corporate machine focused on bottom line financial results and ridiculous Metacritic averages.



I've always been of the opinion that publisher-owned developers rarely succeed over an extended period of time (I'm praying that BioWare proves to be an exception). But sadly we're seeing fewer and fewer legacy indie studios stay independent; just look at Id Software. Perhaps developing Triple A titles has become too costly for indie developers and that instead of signing publishing deals, devs are forced to sign over their entire businesses. It's a sad state, and I'm not sure it's going to change any time soon.


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