Activision Blizzard Inc is pulling the plug on one of its most popular and iconic music games, Guitar Hero. The company ended the six-year old franchise on Wednesday.

One of the reasons given is the decreasing popularity of the music-based games genre. But insiders say that the Southern California-based company was on a staff reduction spree and nearly seven per cent of employees had been laid off which included the team working on Guitar Hero. Nearly 500 people have been asked to leave.

Due to continued declines in the music genre, the company will disband Activision Publishing's 'Guitar Hero' business unit and discontinue development of (the game) for 2011, Activision said while announcing its latest quarterly fiscal results.

Activision also intends to cease development of a True Crime: Hong Kong shooter videogame, saying the decisions were based on a desire to focus on the greatest opportunities in interactive entertainment.

Activision said it remained devoted to upcoming titles for the blockbuster Call of Duty battle franchise. The company also planned to continue investing in online games and digital distribution, which have been gaining popularity worldwide, according to a press release.

Activision reported that it lost $233 million on net revenue of $1.43 billion in the final three months of 2010. It finished the year with a net profit of $418 million on annual net revenue of $4.45 billion.
The company did better than expected in the fourth quarter, which ended in December. This is attributed to the launch of Call of Duty: Black Ops in November.
The game made $1 billion in just six weeks in stores.

Guitar Hero was crafted by Harmonix Music Systems studio originally and became a rage after its world debut in 2005. Viacom Inc, incidentally also sold off Harmonix, the unit behind ‘Rock Bands”, in November as it was running into losses.

Music-based games are more expensive than action adventure games as they come with added paraphernalia and devices which drive up the price. The declining demand for such games made sustaining such a unit unviable.

In 2005 when Guitar Hero hit the scene it was an immediate sensation. Video game players could play out their fantasies of being rock stars and play some of their favorite songs using plastic guitar shaped controllers, pushing buttons on them as directed on-screen. The market grew and special editions were released concentrating on songs from artists and bands of the 60s,70s and 80s. Many singers and rock bands got a new lease of life with their releases on the video games.