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Activision: Why we killed Guitar Hero

Insight: Publishing CEO Eric Hirshberg reveals reasons behind cull...

Activision last night confirmed that it had shut its Guitar Hero business unit and cancelled its upcoming GH game. It signals the end of the road for a franchise which came to define 'party' gaming for the best part of a decade.

In addition, and in another shock decision, the firm has terminated production of its promising open world action game True Crime: Hong Kong.

Yesterday, Activision Publishing's CEO Eric Hirshberg explained the cull in the firm's Q4 2010 earnings call.

Here, we print his comments at length - a business-like farewell to what was, at one time, one of the video games industry's brightest stars...

Although we did well with the core gamer in 2010, we felt the effects of changing consumer demand for peripheral-based and mid-tier titles, which performed well below our expectations.

After two years of steeply declining sales, we've made the decision to close our Guitar Hero business unit and discontinue development on our previously playing Guitar Hero title for 2011.

Despite a remarkable 92 rating on DJ Hero 2, a widely well-regarded Guitar Hero: Warriors of Rock, as well as the 90-plus rated release from our most direct competitor, demand for peripheral-based music games declined at a dramatic pace.

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 catalogue of titles and downloadable content, especially to new consumers, as the install base for hardware continues to grow.

In addition to changes in music, we announced our decision to discontinue development on True Crime: Hong Kong. Even our most optimistic internal projections show that continued investment is not going to lead to a title at or near the top of the competitive open-world genre. In an industry where only the best games in each category are flourishing, to be blunt, it just wasn't going to be good enough.

Zoom

Since the day I arrived at the company, I've said that I believe the best way to achieve commercial success is to provide gamers with the highest possible creative quality. The decision to stop production on True Crime is based solely on that belief.

These are tough decisions, but we believe they're the right decisions being made for the right reasons. And they reflect our ongoing commitment to delivering the games that gamers want to play. As a result of these decisions, we enter 2011 a leaner, more focused organization.

We intend to devote our time and resource to the areas, where we have true competitive advantages and the potential to make gaming experiences that are best-in-class. Our product line-up will be more focused, should be more profitable and will provide deeper online experiences than ever before.

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