Activision to drop 'Guitar Hero'

Music-themed videogames aren't selling like they used to, so the Santa Monica-based company has decided to disband its "Guitar Hero" unit and stop development of the game for 2011. This could involve several hundred layoffs (company has a workforce of 7,000). From Reuters:

"We simply cannot make these games profitably based on current economics," Activision Publishing's chief executive, Eric Hirshberg, told analysts on a conference call. The company also said it would not release a skateboarding game next year and that it would discontinue the game "True Crime: Hong Kong."

From Wired:

In 2007, Activision sold 1.5 million copies of Guitar Hero III in its first month of sales. Last year, Activision only sold 86,000 copies of the latest game in the series, Guitar Hero: Warriors of Rock. Slowing sales of chief competitor Rock Band led Viacom to sell maker Harmonix and close the MTV Games publishing division.

The announcement came as Activision reported a fourth-quarter loss of $233 million, compared with a loss of $286 million in the like period a year earlier. Most recent quarter includes a big writedown. Activision has scored with its latest edition of "Call of Duty," but the videogame business in general had a terrible 2010.