The game that created the modern music game as we know it is no more: During its quarterly earnings conference call today. Activision revealed that it has cancelled the planned 2011 installment of the "Guitar Hero" franchise and the entire unit created to develop the game has been disbanded.
"Due to continued declines in the music genre, the company will disband Activision Publishing's 'Guitar Hero' business unit and discontinue development on its 'Guitar Hero' game for 2011," reads the salient line in the company's earnings press release.
Activision Publishing CEO Eric Hirshberg had more to say about the development. "Despite a remarkable 92 rating on 'DJ Hero 2,' a widely well-regarded 'Guitar Hero: Warriors of Rock,' as well as a 90-plus rated release from our most direct competitor ['Rock Band 3'], demand for peripheral-based music games declined at a dramatic pace," he said in a statement posted on Joystiq. Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand. Instead, what we'll do is focus our time and energies on marketing and supporting our strong catalog of titles and downloadable content, especially to new consumers as the installed base for hardware continues to grow."
It's not yet clear whether the cancellation extends to the DJ Hero franchise, although Eurogamer reports the game's developer -- Freestyle Games -- has undergone a round of "severe layoffs."
Activision bought 'Guitar Hero' publisher Red Octane in 2006 for $100 million. That company formed the basis of what became the 'Guitar Hero' division within Activision, led by Dan Rosensweig as CEO. Rosensweig left early last year, and Activision later shut down the unit but continued to support the development of the franchise.
The death of Guitar Hero marks just the latest in the ongoing downward spiral of the once-mighty music games market. MTV parent company Viacom late last year sold Harmonix -- developer of MTV's 'Rock Band' franchise -- to a private equity group after acquiring the company in 2006 for $175 million. MTV has since ceased all game publishing activities, but says the MTV Games unit remains active in some undisclosed role. Harmonix, under the new ownership, plans to continue creating games and downloadable content for both the Rock Band franchise and the new motion-based 'Dance Central' title for Microsoft's Kinect.