Double down on what works; jettison anything with risk attached. That’s the message that came out of Activision’s fourth-quarter earnings call yesterday. What got jettisoned? The upcoming True Crime: Hong Kong, the future of the Guitar Hero franchise and 500 employees, or about seven percent of its work force. Reports are also saying that much of the Freestyle Games development studio was also let go, calling the continued existence of the DJ Hero series they worked on into question as well. Activision’s official release follows:
“Activision Blizzard will continue to invest its capital and resources in the significant opportunities afforded by online gaming worldwide and will reduce its exposure to low-margin and low-potential businesses. In 2011, the company will allocate the majority of its resources and focus toward opportunities which we expect will afford us the greatest competitive advantages and the greatest potential for best-in-class quality, high-margin digital growth, and long-term success. These opportunities include Blizzard Entertainment’s games currently in development, robust investment in forthcoming Call of Duty titles, the development of a best-in-class digital community surrounding the Call of Duty franchise, a new property from Bungie and an innovative new universe with broad appeal that will be revealed at Toy Fair later this week and will bring the world of toys, video games and the Internet together in an unprecedented way. These investments should better position Activision Blizzard for long-term growth and enable it to continue expanding its position as the largest digital publisher.
“At the same time, 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. The company also will stop development on True Crime: Hong Kong. These decisions are based on the desire to focus on the greatest opportunities that the company currently has to create the world’s best interactive entertainment experiences.”
True Crime: Hong Kong was heralded a return to greatness to the gritty open-world action series that aped much of the design ideas innovated by Rockstar’s Grand Theft Auto series. The title was being developed by United Front, a Vancouver-based development studio that also worked on the hit ModNation Racers for the PS3. United Front was reportedly lining up a roster of voice talent culled from A-list actors from the Hong Kong filmmaking world.
To those who’ve watched the rhythm music genre sing itself hoarse, Activision’s shuttering of all things Guitar Hero can’t be to much of a surprise. Guitar Hero: Warriors of Rock reportedly sold less than 100,000 units at launch, a number that fell well below expectations.
For a few years, it seemed like Guitar Hero–and the performance karaoke genre it belonged to–was a cultural force to be reckoned with. The music industry saw Guitar Hero and second cousin Rock Band as a new and vital revenue stream for both new recordings and back-catalog classic in a post-piracy landscape. Hollywood director Brett Ratner’s love for Guitar Hero was supposedly so great that he was singlehandedly trying to get a movie made based on the property. And Beatles Rock Band–which was developed by Harmonix, the original development studio on Guitar Hero–arguably helped pave the way for the Fab Four to finally show up on Apple’s iTunes service.
Activision merged with Blizzard–the company responsible for the uber-popular Starcraft and World of Warcraft games–several years ago, resulting in the world’s largest video game publishing organization. When it comes to game-making, Blizzard’s kept its autonomy but Activision’s come under criticism as a company that pays short shrift to creative culture. The exec leadership’s preferred to grind out annual installments on its key franchises, no matter which development studio does the work. Such a strategy’s worked for its Call of Duty franchise, despite an ugly–and legally combative–split with the studio that make the series a record-breaking success. The company’s also seen diminished returns with the once, all-powerful Tony Hawk games. After rebooting the series around a plastic skateboard controller with 2009’s Tony Hawk Ride, sales and critical appreciation plummeted. Just as the Tony Hawk titles began to wane, rival EA captured the skateboard gaming audience with its stripped-down, realistic Skate series.
(More on TIME.com: “Call of Duty: Black Ops” Reaches $1 Billion In Sales)
While the future may not hold more musical Hero games for Activision, it will deliver more Call of Duty and the unveiling of the hotly-anticipated title from Bungie, the dev studio that created Microsoft’s blockbuster Halo franchise. Rumors have swirled that Bungie’s project might be an MMO like Blizzard’s WoW and that Activision wants to build a pay-to-play component into Call of Duty, whether as a standalone offering or a new feature in forthcoming games.