Is it better for living room rock stars to burn out than to fade away? Activision announced yesterday that Guitar Hero’s flame is going to be extinguished. Today, the company’s stock took a stage dive and no one was there to catch it.
What went wrong for the once immensely popular Guitar Hero franchise? Certainly a number of different factors were at play. The public became bored with music games, especially as each update to the Guitar Hero franchise added few new features.
The game’s primary competitor, Rock Band, fractured the music gaming market and led to oversaturation. In an interesting twist, Rock Band was produced by the same company that developed Guitar Hero. In 2005, indie game studio RedOctane and Harmonix collaborated to create Guitar Hero. The game was sold to Activision in 2006 for around $100 million. Harmonix then went on to release Rock Band, the first music game to add a microphone and drums to the experience (Guitar Hero soon followed).
While Guitar Hero was tremendously profitable for Activision over the course of its life, earning a reported $2 billion, the franchise has been bleeding money since the most recent holiday season. Activision was forced to make the decision to shut down production and lay off the Guitar Hero division’s 500 employees.
The next big question for Activision is whether it’s biggest game franchise is next. Call of Duty still sells games in record numbers, but Activision is certainly flirting with market oversaturation for that game, too. As long as the company sticks to a strict plan of releasing no more than one new physical and one new downloadable Call of Duty title each year, it should leave gamers wanting more.