No more Guitar Hero; Call of Duty still really, really popular

(Updated 2/10)

Activision/Blizzard will stop publishing the once-proud Guitar Hero franchise, a development that led to “RIP Guitar Hero” being one today’s lead topics on Twitter.

The game publisher announced the news today while releasing financial disclosures for 2010. Activision/Blizzard will also cancel development of “True Crime: Hong Kong.”

But Activision/Blizzard is not exactly hurting for business. The Call of Duty and World of Warcraft franchises continue to be big money makers. The company reported 2010 net revenues of $4.45 billion.

Santa Monica-based Activision/Blizzard reported a $418 year-end profit, although the firm experienced a $233 million loss during the Fourth Quarter.

The new figures were better than Activision/Blizzard’s 2009 numbers. In 2009, the firm earned a $113 million profit for the year and endured a $286 million loss in the Fourth Quarter.

How did they get there? In addition to the numbers, Activision/Blizzard also bragged that the firm is the Number One game publisher in North America and Europe. Selling 3.3 million units of “World of Warcraft: Catclysm” since its December didn’t hurt. Neither did selling more than $650 million worth of “Call of Duty: Black Ops” in the game’s first five days of release.

Activision also reports that 27 million players have clocked more than 2
billion hours – more than 229,000 years – playing Call of Duty games. That figure only requires those players to play an average of about 74 hours.

Gaming website IGN took part in Activision’s conference call and noted that the publisher now views the games business as “blockbuster or bust.” Within that context, IGN is able to report that last year’s “Transformers: War for Cybertron” was a sales dud for Activision.

Despite positive reviews, the Transformers title missed out on being on of the industry’s Top Ten selling games when it was released in June, IGN reported at the time.

Despite the demise of Guitar Hero, the game was still featured prominently on Activision/Blizzard’s corporate homepage Wednesday. Loading the homepage was more likely to produce an image of digital Slash or another rock star than one of Call of Duty’s many soldiers.

But Call of Duty is the future of Activision. The Los Angeles Times reports company’s plans include “BeachHead,” an online service for the Call of Duty franchise. Activision released few details on what exactly BeachHead will be.

The Times’ report observes that the end of Guitar Hero is a major factor in the ending of some 500 employees’ jobs and Activision/Blizzard’s business reflecting the “hit-driven nature of the video-game industry in which consumers flitter from one fad to another.”

Thus the LAT reports that investors are less excited about Call of Duty than the franchises fans:

Activision said it expected 2011 revenue to hit $3.95 billion,
substantially less than its 2010 revenue of $4.45 billion. The forecast
came in lower than most Wall Street analysts had been expecting,
triggering an 8% slide in the company’s stock price.

Activision’s shares were also depressed by investor concern over the
concentration of the company’s revenue in just two franchises, Call of
Duty and World of Warcraft, said John Taylor, an analyst with Arcadia
Investment Corp. in Portland, Ore.

Nonetheless It was not so long ago when Guitar Hero was practically everywhere, especially displays in stores like Best Buy or the now vanished Circuit City, where customers would take a break from shopping to pretend to be on stage somewhere. It’s now easy to find Guitar Hero and rival Rock Band titles in used bins at low, low prices.

I have no idea if Call of Duty will ever mirror Guitar Hero’s rise and fall or remain a perennial big seller like EA’s Madden NFL series. What I do know is that many real musicians won’t weep for Guitar Hero.