Activision: We’ve had to make some difficult decisions

With the games industry still coming to terms with the shock death of the Guitar Hero series, Activision Publishing CEO Eric Hirshberg has outlined the reasons for the dramatic decision.

Primarily, he argues that the transition to new business models – and ones that are primarily digitally driven – is the cause for a rethink of how the publisher conducts its console business.

"With the growth of online play, we’re continuing to move away from thinking about our product releases simply as launch events and viewing our brands as an opportunity to build long-term relationships with our players," he told investors, as transcribed by Seeking Alpha.

"As a result of these changing dynamics, we have had to make some difficult decisions to ensure that our capital and the creative talents of our exceptional people are applied against the biggest opportunities. After two years of steeply declining sales, we’ve made the decision to close our Guitar Hero business unit and discontinue development on our previously playing Guitar Hero title for 2011.

Hirshberg also explained that critical acclaim in the mussy genre has not proven enough to save it from a steep drop in returns.

"Despite a remarkable 92 rating on DJ Hero 2, a widely well-regarded Guitar Hero: Warriors of Rock, as well as the 90-plus rated release from our most direct competitor, demand for peripheral-based music games declined at a dramatic pace," he added.

"Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand. Instead, what we’ll do is focus our time and energies on marketing and supporting our strong catalog of titles and downloadable content, especially to new consumers, as the install base for hardware continues to grow.

"These are tough decisions, but we believe they’re the right decisions being made for the right reasons. And they reflect our ongoing commitment to delivering the games that gamers want to play. As a result of these decisions, we enter 2011 a leaner, more focused organisation. We intend to devote our time and resource to the areas, where we have true competitive advantages and the potential to make gaming experiences that are best-in-class."