Activision Cancelling Guitar Hero Franchise

Activision has announced it will be scrapping the Guitar Hero franchise later this year, saying it was no longer possible to produce the games at a profit.

The company will continue selling previously-released games, including DJ Hero, along with downloadable content. However, there’ll be no new material after this month.

According to the company, “we have seen rapid declines in the music genre, and unfortunately, based on current demand, we simply cannot continue to profitably make these games given the considerable licensing and manufacturing costs.”

That appears to suggest that most bands and publishing companies were getting large flat fees rather than working on a purely royalty basis, and aren’t prepared to change that set-up. Activision once claimed that Aerosmith made more money from their dedicated Guitar Hero game than from any single album.

The changes, which follow a $233 million loss in the last three months of 2010, will mean the closure of an entire Activision division with the loss of 500 jobs.

Debate is already underway about what caused the decline in sales and in turn this cancellation. The most popular theory is simply that the concept had run its course: it wasn’t easy to come up with new changes to the fundamentals of the game without making it too complicated for the casual audience, but when it came to new song content, the sure-fire hits had been exhausted.

As well as the music games, the company also says it has abandoned work on True Crime: Hong Kong, which would have been a sequel to the PS2-era Los Angeles and New York games. In a remarkably frank comment, Activision chief Eric Hirshberg is quoted as saying that “to be blunt, it just wasn’t going to be good enough.”

It’s been reported that the game was still in development but had reached a point where it was playable from start to finish. Given how much has already been spent on the game, the fact that Activision considers it better to ditch rather than release it and risk a flop tells you something about how much of the costs of a game must lie in launch and publicity.

(Picture credit: Comedy Central)

Advertisement





6 Responses to Activision Cancelling Guitar Hero Franchise

  1. It's pretty obvious that the licensing costs were simply too much, or too much of a risk. Just imagine, the production companies take a estimated number of times the songs will be listened to over a period. Average the licensing costs for that amount over 5 or 10 years, and add an additional 50% just to be safe. Of course they would want it up front as there's no way to track the numbers of times a song has been played once a game is released, and if the game flops, the production company doesn't make anything. When you release a game that takes multiple years for the game to make money, it's a huge gamble. Now that there are 10 other companies and 50 other competing games, it's just not worth the risk. Music producers would rather see a great product fall than to comprimise on their costs.

  2. According to the company, “we have caused rapid declines in the music genre, and unfortunately, based on current demand, we simply cannot continue to profitably make these games given the considerable licensing and manufacturing costs.”

    There, fixed that for ya.

  3. "Given how much has already been spent on the game, the fact that Activision considers it better to ditch rather than release it and risk a flop tells you something about how much of the costs of a game must lie in launch and publicity."

    If you haven't yet, watch Kevin Smith's post-Sundance talk – he's distributing his next film himself for precisely this reason: film companies pump roughly 5x the cost of the film into marketting it, meaning not only must the film re-coup it's budget, not only must it also re-coup the marketting costs, but the vendors (cinemas with film, shops with games) keep roughly half the sale cost themselves, so actually the product must make back about 10x it's production costs. Which is pretty silly. Kevin Smith's not spending a dime on advertising, tweeting to his existing fanbase (which should be enough to cover the production costs, thus turning a profit very quickly compared to if they also had extra marketting costs) and advertising on his podcasts.

    As he says, there really has to be a new distribution model because the current one is actually not helping products make a profit in the slightest.

  4. Interesting stuff — I'll check it out.

    Ironically I've also read that movie studios are very concerned about social networking because of how much more quickly word of mouth spreads: if a movie sucks, people now find out about it from friends on the first night rather than it taking a few days to filter through (for example, people talking to work colleagues after the weekend.)

  5. Activision
    "We can't milk this franchise anymore because the market is saturated"

    and I call BS on the True Crime game.
    They just couldn't figure out a way of charging the "customer" more for in-game items and/or access to new locations.