"Soft" launches of Activision's Guitar Hero: Warriors of Rock and DJ Hero 2 led one analyst on Monday to significantly downgrade combined U.S. sales estimates for the two new titles.
"We expect the two Hero titles to struggle to sell 1 million units combined in the U.S. during Q4 2010, versus our prior expectation of roughly 2.5 million total U.S. Hero units," said Cowen analyst Doug Creutz in a research note.
"The only silver lining is that the music genre should cease to be a focus of investor concerns as it has now become fairly immaterial to overall results," he added.
Guitar Hero: Warriors of Rock, developed by Activision-owned Neversoft, released on September 28 this year in North America. Research firm NPD Group said the game sold just 86,000 units during the month, although that figure only includes the first few days of the game's availability.
Creutz said that the U.S. launch of FreeStyle Games-developed DJ Hero 2 appears to be "equally soft." Creutz said, "...The music genre appears headed for a round-trip back to where it stood prior to the explosion of the Guitar Hero phenomenon back in 2006-07."
More speculatively, Creutz said that he believes "Activision's best option at this point would be to approach Viacom with [the] idea of (re)merging the Guitar Hero and Rock Band franchises through a sale or joint venture agreement."
Both franchises were created by current Rock Band developer, Viacom-owned MTV Games studio Harmonix, which is launching Rock Band 3 this week to positive reviews. Activision owns the Guitar Hero brand and currently publishes the game.
Any partnership between Viacom and Activision in the music genre would be unexpected -- the two companies have been fierce competitors in the music category since Harmonix launched the Electronic Arts-distributed Rock Band in 2007.
Creutz still is optimistic that Activision can have a strong holiday with the release of Treyarch's Call of Duty: Black Ops, raising sales estimates for the November title to 14.4 million units worldwide, up from his previous estimate of 13.7 million. The new estimates are still 10 percent down from actual sales of last November's Infinity Ward-developed Call of Duty: Modern Warfare 2.