RedOctane closed by Activision?

Original Guitar Hero shop named as the latest casualty in publisher's sweeping cuts; Van Halen developer also shuttered.

Source: A report on Kotaku says Activision has closed down Mountain View, California-based RedOctane and fellow Bay Area shop Underground Development. The moves serve as a gruesome capper to a day that saw Activision cull staffers at Radical and Neversoft and shutter Luxoflux.

What we heard: It has been a busy week for Activision. The publisher announced its year-end financial results Wednesday, showing an annual $113 million profit--but a quarterly loss of $286 million. The latter shortcoming was blamed on a write-down of its ryhthm-game assets, which were devalued by the ongoing music-game glut. The company's lineup of Guitar Hero games suffered significantly, with sell-through down 35 percent from 2008.

Jimi plays "Little Wing" in memory of RedOctane.

That prompted Activision to take action, dramatically scaling back its slate of Guitar Hero SKUs (stock-keeping units; a game with two different bundles on three platforms each would be six SKUs). In 2009, Activision bombarded retailers with 25 different Guitar Hero SKUs, from the PlayStation 2 edition of Guitar Hero: Van Halen to the Wii version of Guitar Hero: Metallica. For 2010, Activision is planning just two major music games--a Guitar Hero game and DJ Hero 2--with fewer than 10 SKUs.

If Activision is making fewer games, that means it needs fewer development teams, something confirmed yesterday by the publisher's layoffs across the company. Radical Entertainment (Prototype) and Neversoft (primary Guitar Hero developer since 2007) endured some layoffs, while Transformers: Revenge of the Fallen studio Luxoflux was shuttered entirely.

That RedOctane would be included in the cuts is not entirely surprising. That it would be shuttered entirely is. Kotaku reports that RedOctane "has been completely shut down," with some key employees retained to "report straight to Activision" and 30 to 40 others laid off. The blog also says Underground Development, which worked on Guitar Hero: Van Halen, has been shuttered.

A source within the company confirmed for GameSpot that Activision is planning to close RedOctane down within two months and that the publisher is discarding the brand name entirely. If even the outfit that published the original Guitar Hero and was acquired by Activision for $100 million is expendable, the publisher would have little reason to flinch in closing a shop that worked on exactly the sort of spin-off project that won't be made this year.

The official story: "As part of our overall strategy to release fewer Guitar Hero SKUs in 2010, we are closing the Underground studio and relocating Guitar Hero headquarters to Santa Monica under the leadership of [Guitar Hero business unit COO] David Haddad." - An Activision representative.

Bogus or not bogus?: Unfortunately not bogus.

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Discussion

291 comments
Tezerel
Tezerel

@Scisor50 I hope they don't just make them cuz-we-have-to, and develop them well. No idea for sure though

Scisor50
Scisor50

@Tezerel You think maybe they will ruin the games or make them better?

2point5RSman
2point5RSman

finally something good comes from people speaking with their wallets.. i feel bad for the employees however im glad activision wont be inundating the market with 25 different CODs this year.

chesed
chesed

Honestly, I thought RedOctane was the only good thing about Guitar Hero since Harmonix left. The peripherals were better than Rock Band imo. I hope that now-ex employees get picked up by Harmonix to get the band back together. That would be awesome.

Tezerel
Tezerel

@Scisor50 Ive read that they plan to get rid of the brand name of GH after these last two games too. just cutting there losses, and they prolly have to release these last ones

Ohaidere
Ohaidere

"this year we get medal of honor and battlefield..call of duty will be forgotten" Because there's been a hit MoH title since Allied Assault amirite?

Scisor50
Scisor50

Nah... Guitar Hero will keep on existing. It's just that they won't be directed by the same guys.

zakkess
zakkess

call of duty is next, this year we get medal of honor and battlefield..call of duty will be forgotten, then dissapear from activision

ZippyDSMLee
ZippyDSMLee

Infinity Ward is as likely to get shut down and some cheaper dev used for the COD series.... thats how big biz works ....

cejay0813
cejay0813

Ding Dong the witch is dead! Which ole witch The wicked witch! Ding Dong the wicked witch is deeeeaaad

UnitedGamerz
UnitedGamerz

For people saying COD is next on chopping block is wrongggggggg!!!!! COD makes a lot of money for activision. If they canceld COD activision would lose a lot of money. Mw2 made a billion in just under 4 months. It would be crazyyyyyyyyyy if they canceld it. Plus there would be a lot of riots loool. People will go crazyyyyyyy. They would start killlllllllling people!!!!!!!!!!!!

Richardthe3rd
Richardthe3rd

@ sumedh7 I agree that the fanbase for CoD and Guitar Hero are vastly different. That will make a difference in the longevity of the series, as GH has a larger casual following that tends to lose interest more quickly. That's not a slight against casuals; they're players who are just looking for the next great thing and it makes devs work a bit harder sometimes. On the other hand, I don't know if any franchise, even CoD, could sustain an SKU bombardment like rhythm games had last year. So it was definitely part fad, part over-saturation.

inaka_rob
inaka_rob

never jumped on that band wagon... GET IT?!??! no but really. Sucks that those guys lost their jobs, but they have some impressive stuff to put on their resumes. Its not like they made some stink bombs then got canned. They only got canned because of the Activision business side of things

Proman84
Proman84

Conisdering the history of the games it made: mega ouch! And even without that history, I hope these developers find great jobs!

jazilla
jazilla

WaW is a great game for those of you talking smack. Their games tend to be less buggy in the CoD franchise. Their menus are better as well. Kills are way more satisfying in WaW than in MW2 imo.

sumedh7
sumedh7

@ Rickardthe3rd i dont think COD i gonna go like GH rite now cuz it is still bringing in record numbers and profits for the company they just need to cut the baggage known as Treyarch, not add any more baggage, and keep the gold standard of IW

niuhock
niuhock

activision does this enough they're not going to have enough titles to turn profits on, they'll shrink, startup companies will start popping up with the laid off developers they'll get big, then activision will buy them to boost profits, run them into the ground, and the cycle continues

oldschoolKEN
oldschoolKEN

Lets all go back to Beatmania! Much better game.

melty3219
melty3219

good, thats one less crap developer in the industry

Jackmac36
Jackmac36

Not that big of a shock, considering Guitar Hero and Rock Band are not what they used to be a few years ago. I like the series, but when they changed the rock band drum style to include the cymbals, they screwed over the rest of us who don't have enough money to purchase another set of plastic drums and continue to play later Guitar Hero/ Rockband games. I believe that if they cut down on all of these stupid SKUs, and make the new drums more available then they would bring in a bigger profit.

meateater79
meateater79

Really!? Activision releases 25 SKUs for a franchise in a year and they're surprised that sales dropped 35%. I think they're surprised that people are still buying what are essentially DLC packs sold at a retail price. Please, release some new IPs already! I've even gotten sick of MW2 and I love CoD! It's like playing a great game for 2 years straight (CoD4, WaW, MW2).

enoslives7
enoslives7

Activision is a piece of crap that is going to drag down Blizzard. They guys at Blizzard need to distance themselves from Activision ASAP.

Blue-Sky
Blue-Sky

Activision: now matter how successful you are, you will get fired.

Richardthe3rd
Richardthe3rd

@Sparkypants: Yep; I think CoD is next up to the chopping block as they've already got an abundance of titles in the franchise planned. I'd put my money on Activision shifting SKU's over to the CoD franchise. As a company, Activision is going to do everything they can to post big numbers again in 2010, because they're a very numbers driven company (obviously). What's happening with EA is a crystal-ball foretelling of where Kotickvision is going, and it's sad because that means this is going to happen again, soon.

sparkypants
sparkypants

Activision=Franchise killers. They bought out Red Octane and drove it them to the ground, nice work! They killed Tony Hawk and now Guitar Hero, I wounder whats next...Call of Duty?

ichiban30
ichiban30

More job losses in the gaming industry... sad. Best of luck to those who lost a job and their families.

rann89
rann89

Jesus. People are JUST NOW learning how ridiculously boring guitar games are getting? They should have stopped at Guitar Hero 2 and just made people pay for the songs that came out on the last 6 games.

ZedX-14Pilot
ZedX-14Pilot

I hate stupid music games anyway. They SEVERELY flooded the market with that genre. Definitely not sad to see them go.

jadefury27
jadefury27

red octane's best days of making peripherals died the minute dance dance revolution's popularity declined. they made some decent stuff.

Midnightshade29
Midnightshade29

Screw you activision....not like you care what we think, we just won't buy your crummy rehash games kottick! You fools are greedy!!!!!!!!!!!!! You make a bazillion dollars with modern rehash 2 and then you pull this crap.

Nekromenos
Nekromenos

I won't call Bobby Kotick an ass with a pedosmile because last time I did, Gamespot decided to send me a warning (they don't like people picking on rich influential boys I suppose) ... But that guy represents everything wrong with corporations and greedy, slimy CEOs nowadays. It's all about the money, isn't it? Favorite quotes (his interviews are all around if you need the sources): "We don't care if a game is fun, we care about how good it sells...", "Employees should live in a world of fear, it makes them more productive to know that each day might be their last at work..." Go to hell I say...

Tezerel
Tezerel

And to that DumpyWasteman guy, get the **** away from me your pic looks gross, your writing is gross. Your weird too wtf get outta here

Tezerel
Tezerel

@Ozzie234 Your hella weird

Ozzie234
Ozzie234

[This message was deleted at the request of a moderator or administrator]

Aletunda
Aletunda

guitar hero isnt played enough anymore because everygame is like the last and online is shocking

im-a-roustabout
im-a-roustabout

Only a greedy company could pull something like this off; making the gamers tired of an amazing innovative game in less than 4 years!

kardon16
kardon16

guitar hero is running out of classic rock song anyways

Justinge3
Justinge3

What goes around comes around. I hope they learned their lesson alienating guitar hero fans with so many games.

2x4b96123
2x4b96123

Activision is too big and is trying to grow too fast. Sooner or later you're gonna LOSE money by pumping out more games than anyone wants to buy

Viron_Berserker
Viron_Berserker

makes me miss EA being the biggest a**hats in the buisness. Those were the good old days.

Joemama2069
Joemama2069

Im still pissed I bought GH5 because I thought Van Halen would be kick azz...regretting that today!

izmickey
izmickey

Kodick is learning that his business decisions sucked and the employees have to pay for it. Seriously, right now activision is like a disease to the gaming industry that needs to be taken care of.

AuronTsubaki85
AuronTsubaki85

Guitar Hero after III & Metallica = The Heaven's Gate of Rhythm Based Games. I always enjoyed Rock Band better anyways cause it wasn't always tortured with emo type bands like GH, they didn't murder singers & songwriters like they Actiscum did with Johnny Cash & Kurt Cobain by having the two examples sing other songs instead of their own & they always add some special downloadable content when they want to. I'm still looking forward to The Who: Rock Band if they plan on making it.

loopy_101
loopy_101

Maybe Activision should re-organise their developers (especially Neversoft) into making more original games rather than sequels to the same tired old FPS and rhythm releases. These layoffs aren't sorting them any favours.