Guitar Hero Gets the Axe

Is Guitar Hero now axed from your party game playlist?

(CNN) – The stock price for Activision Blizzard hit a sour note Thursday, the day after the video game company said it was abandoning “Guitar Hero” and focusing on battle games such as “Call of Duty.”

“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,” said Activision, in its fourth-quarter earnings statement Wednesday.

241Email Print Shares were down 10% Thursday after the company posted its quarterly earnings and released its forecast for 2011, which was below what analysts were expecting.

Investors may not be happy, but analysts say the company is making a move that’s necessary to stay competitive.

“These guys are smart and they realized that the packaged goods business is going away,” said said Todd Mitchell, analyst for Kaufman Brothers, referring to games such as “Guitar Hero,” which is loaded via a compact disc and uses mock plastic guitars. “They want to shift to a digital model. It was a choice they made to exit businesses they felt were subpar profitable.”

Despite its brand recognition, “Guitar Hero” sales have been on the decline, said Mitchell. So Activision is focusing on games such as “Call of Duty” and “World of Warcraft,” which can be played online against online opponents.

A few years ago, it would have been hard to imagine “Guitar Hero” getting ditched. The game took the video game industry by storm after it was launched in 2005, reaching $1 billion in sales within a 26-month span, according to Activision.

[Full article at CNN.com]

Posted By BG Crew

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