Guitar Hero Franchise Terminated
Most people have enjoyed being living room rock stars on Activision’s big hit Guitar Hero. This music game allowed players to play lead guitar to their favorite songs with a fake, easy to play guitar. The termination of this popular game carried bad news for many Activision employees. A total of 500 employees were laid off as of result of Activision’s decision. True Crime: Hong Kong, a spin off of the very popular Grand Theft Auto series, was also scraped.
The 500 employees that will get laid off make up about 7% of the workforce at Activision. With the different fads that come and go, having a successful, long-term video game franchise is rather difficult to produce. Just two years ago, Guitar Heromade Activision over one billion dollars in revenue, becoming the hottest music video game on the market. Now, it is pulling in significantly less money, with the poor performance of the latest game Guitar Hero: Warriors of Rock. At least Activision has recognized that right now, people are playing dance games and online games, not band games.
Although Activision has pulled the plug on two of their game franchises, they are going to continue to support the popular online game World of Warcraft, and the record-breaking franchise Call of Duty. World of Warcraftcurrently charges its 12 million subscribers up to $15 per month to play its massively multi-player online role playing game, or MMORPG. The huge hit add-on, World of Warcraft: Cataclysm, sold 4.7 million copies in just one month after its release date in December.
Even with all of these terrific numbers, Activision is only projected to have $3.95 billion in revenue in the 2011 year, a big disappointment from last year’s $4.45 billion in revenue. Activision does have a few new projects that it will be releasing this year, but they were not added into the estimation since the release dates are not yet set.
The new revenue estimation has caused an 8% drop in Activision’s stock price. The company’s focus on just Call of Duty and World of Warcraft also is causing concern for some investors. What used to be a very successful company with several popular titles is slowly becoming less profitable and less willing to take some risks that could have some very profitable results.
Even with such high revenues, Activision is refusing to shoot for certain fads that can produce some serious revenues and help them bounce back from the sad loss of a great game franchise. With the new dance game craze sweeping the world, many companies are rushing to make the next big title in this genre. Activision is not one of those companies though. Instead of chasing rainbows, Activision is sticking to what they know, which happens to be first person shooters and massively multi-player online games.
Activision can be both applauded and criticized for these aspects. Without the willingness to go into different gaming genres, companies can easily lose the interest of gamers, but if a company is always trying to do something different, they can lose consistency in their games and forget what kind of company they really are.
With the recent termination of the Guitar Herofranchise, Activision is laying off employees, and losing trust with their investors. They will continue to produce their successful titles, like Call of Duty, but they are also taking on a few obscure projects that will be released some time this year.
For more information on these topics, please visit http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/02/activision-guitar-hero-layoffs-call-of-duty-beachhead.html.