There was a time when your game was nothing if didn't come with a large plastic peripheral that was hard to store. Music games like Guitar Hero and Rock Band soared to the top of the charts, racking up $1.6 billion in sales in 2008 alone.
Gamesutra charted the decline back in November, but the final numbers were much worse than expected. The sales for 2010 wound up somewhere around the $250 million mark. That may sound like a lot, but given the huge production and licencing costs involved with these products, that's not enough money to keep the lines profitable.
That's why, at the end of last year, Viacom listed Harmonix (the creators of the original Guitar Hero and Rock Band games), as a "discontinued operation" and put them up for sale. Two short years ago Harmonix was at the top of the mountain as a game developer and now they no longer exist. I've never actually seen a development house fall that far, that fast.
Now comes word that the Guitar Hero series has been axed, at least for the foreseeable future. Activision CEO Eric Hirshberg explained it it this way:
"Demand for peripheral-based music games [has] 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."Short version: everyone has all the plastic guitars, drums, microphones, and zithers they'll ever need or want, so we're just going to sell songs online.
And that's actually completely reasonable. Given the declining sales, retailers were sure to balk at giving floor space to more big-box games, and producing the instruments isn't cheap. Licencing and selling new song packs, however, is as close to pure gravy as you're going to find. Although it's a bit surprising to see the "collapse" of an entire genre only a few years into its existence, I'm not sure I read this one as a collapse. The games and downloads continue to be fairly popular: people just don't need the big hardware and annual software updates anymore.