Activision made some huge, somewhat unexpected news today announcing lay-offs, studio closures, game cancelations and more during their financial earnings release, showing a drastically different outlook than was presented back in November.

Eurogamer initially reported (information that has since been corroborated and confirmed) that the publisher has decided to postpone the next entry of Tony Hawk, and are disbanding the Guitar Hero business entirely. Both properties had 2011 installment penciled in just a few months ago.

According to the company, “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.” There will be “no new music or skateboarding games” this year, giving a slight sigh of relief to those fearing the previously teased onslaught of new peripherals. “Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand,” says publishing CEO Eric Hirshberg.

Guitar Hero studio Vicarious Visions have been hit with lay-offs, along with Freestyle Games too, according to rumblings. Original GH team Neversoft were gutted in 2010, and after finishing Warriors of Rock the series moved to Vicarious. Neversoft has since moved on to a new IP, sources say. While they’ve not confirmed further details, killing the ‘Hero’ business presumably includes DJ Hero and Band Hero, as well; at least for 2011, anyway. A third DJ Hero was expected (on the 3DS, no less), and Band Hero 2 and 3 were said to have already been in the works last year. This follows a restructuring of the Hero division in 2009.

Whether the property will resurface in another year remains to be seen, and it may very well do so, since dissolving the dedicated GH division doesn’t outright mean “killing the IP off forever”. However, No more DLC is being developed for existing games after this month. Rock Band publisher Viacom chose to exit from the music games business last fall as well, selling Harmonix and shuttering MTV Games. Harmonix has retained the Rock Band rights and will continue developing new entries, so I guess we know what franchise won out in the end.

As for Tony Hawk, Activision had recently maintained (hot off of the retail bomb SHRED) that it wouldn’t be given up on just yet. New developer Robomodo laid-off staff in 2010, and were reportedly taken off the franchise before SHRED shipped.

Activision has also completely canceled United Front Games’ True Crime: Hong Kong, which was delayed last fall, and was scheduled for release in the next few months. Brand new screens emerged just last week of the open-world crime reboot.

“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,” said a statement, with the company president Bobby Kotick adding “it just wasn’t going to be good enough.“

Moving on to Call of Duty, arguably Activision’s cash cow next to World of Warcraft, well, it’s depressing. Infinity Ward, Raven Software, Treyarch and Sledgehammer Games are all involved with the franchise, and yet another studio (which we’ve never heard of before) has been brought on board. Activision is readying “the development of a best-in-class digital community surrounding the Call of Duty franchise,” to be created by newly formed internal team Beachhead, which will add a “suite of services to supercharge the series like never before.“

Details on this platform will be spilled at a later date, but it’s apparently been in the works for a year already. Is the long, long-alluded to subscription service becoming a reality? Very possibly, or some variation on it, with a description containing the fact that it’ll “support in-game integration and bring online experiences and console play together for the first time.” 2011 will play host to “the largest line-up of digital content ever” for Call of Duty, with the first map pack for Black Ops already on the market and raking in the money. Perhaps this a Battle.net-like platform?

What’s more, the publisher finally spoke briefly on their plans to bring CoD to the Asian market, saying that a free-to-play microtransaction-based multiplayer spin-off will arrive in the region in the future.

As we’ve already heard before, a new Call of Duty is due out later this fall, allegedly Modern Warfare 3.

Wrapping up the news, total workforce within Activision has been reduced by roughly 500 staffers, as well. “Our net head count at the end of the year is probably not going to be materially different given that we’re ramping up development teams around Blizzard’s new MMO and around the Call of Duty initiatives,” confirmed COO Thomas Tippl.

No word on the next James Bond, Transformers or X-Men titles. However, Spider-Man returns this year with another game by new series helmers Beenox. And lastly, Bungie’s new 10-year exclusive IP won’t be releasing in 2011.


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