Activision pulls plug on Guitar Hero music game

Wed Feb 9, 2011 8:16pm EST
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By Liana B. Baker

NEW YORK (Reuters) - Activision Blizzard said on Wednesday it would disband the unit that makes its Guitar Hero games, citing declining popularity for music-themed video games.

The company, whose first-quarter outlook was below Wall Street expectations, said it would disband its Guitar Hero business unit and stop development of the Guitar Hero game for 2011.

"We simply cannot make these games profitably based on current economics," Activision Publishing's chief executive, Eric Hirshberg, told analysts on a conference call.

The company also said it would not release a skateboarding game next year and that it would discontinue the game "True Crime: Hong Kong."

In December, Viacom sold Harmonix Music Systems, the developer behind the Rock Band franchise, to the investment firm Columbus Nova and gained up to $200 million in the deal, analysts have estimated.

Activision Blizzard announced a new digital platform, "Beachhead," which will focus on the highly successful "Call of Duty" franchise.

Since the launch of "Call of Duty: Black Ops" in November, it has pulled in more $1 billion in sales.

The company's shares fell to $10.81 in after-hours trading compared with a regular-session close of $11.69.   Continued...

<p>Visitors play Guitar Hero 5 game during the video game show in Paris September 17, 2009. REUTERS/Charles Platiau</p>