Activision axing Guitar Hero and True Crime; Freestyle Games reportedly hit with layoffs [update]

Despite a recent cover story in EGM, United Front's True Crime: Hong Kong won't make it to retail. Activision's latest earnings report confirms the game's cancellation, as well as the end of the Guitar Hero franchise.

"Due to continued declines in the music genre, the company will disband Activision Publishing's Guitar Hero business unit and discontinue development on its Guitar Hero game for 2011," Activision said in its financial statement. The statement goes on to confirm the cancellation of True Crime. "The company also will stop development on True Crime: Hong Kong. These decisions are based on the desire to focus on the greatest opportunities that the company currently has to create the world's best interactive entertainment experiences."

Activision Publishing CEO Eric Hirshberg went into a bit more detail on today's investor call:
"Despite a remarkable 92 rating on DJ Hero 2, a widely well-regarded Guitar Hero: Warriors of Rock, as well as a 90-plus rated release from our most direct competitor [Rock Band 3], demand for peripheral-based music games declined at a dramatic pace. 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 installed base for hardware continues to grow."
Hirshberg continued, saying that True Crime's development, "was't going to lead to a title at or near the top of the competitive open-world genre." To put things more directly, Hirshberg added, "To be blunt, it just wasn't going to be good enough."

If that weren't enough bad news, Eurogamer also reports that DJ Hero developer Freestyle Games has suffered "severe layoffs," though it's unclear whether the rhythm series has been affected by the alleged redundancies. We'll update this post as we learn more.

[Update: An earlier version of this post was based solely on Eurogamer's report, which has since been partially confirmed by Activision.]

[Update 2: United Front Games has commented on the cancellation of True Crime]
We are sorry we did not get a chance to complete this project with Activision, but we understand why. We are both committed to doing quality games and nothing less. Maybe we will have a chance to work together in the future, but in the meantime we are setting our creative sights on a different horizon.

This article was originally published on Joystiq.