Activision CEO Bobby Kotick has admitted the company didn't pay enough attention to Guitar Hero's gradual demise, focussing instead on its misplaced "passion" for DJ Hero.
"Guitar Hero has had enormous success. After a few iterations of the game it became one of the most successful games of all time," Kotick said in an extensive interview with Forbes.
"And then we didn’t really take the time that we usually take to understand audience behavior.
"It was one of those things where we were resting on the idea that one of the essential fantasies of video games is to unleash your inner rock star. So we went off on a passion project that had a point of differentiation – which is called DJ Hero."
Kotick said Activision didn't stop to consider the question, "How many people really want to unleash their inner DJ?"
"And then out of the people who do want to unleash their inner DJ, how many want to do it in the context of a game where you earn points, versus just taking a DJ deck or tools on their Macintosh and actually being a DJ? And it turns out it’s a very small market," he said.
The CEO said critically acclaimed games like DJ Hero which fail to sell well are the "hardest failures".
"When you put your heart and soul into it and you deliver an extraordinarily well received game, and nobody shows up to buy it," he mourned.
"So that’s what happened with DJ Hero. At the same time we were so excited about going down this new direction with DJ Hero, I think we abandoned a bit of the innovation that was required in the Guitar Hero franchise."
Describing the sales failure of both games as a "double whammy", Kotick said it took both off the market in order to reinvent them. Kotick feels the mega-publisher's ability to weather such failures is one of its strengths.
"The most important thing we do to encourage innovation is give people the freedom to fail," he said.
"We have what we call the post mortem process, really evaluating what is it that caused an outcome not to be aligned to the original expectation. And sometimes it’s not even like an abject failure, if the game just doesn’t sell, sometimes it’s a game that doesn’t sell as well as you would have expected, or in some cases more importantly, if it doesn’t feel like it meets the expectations of the audience."
The full interview is an extremely hefty read, but well worth it if you're interested in how a publisher as large as Activision functions. Follow the link above to find out about failed negotiations with Led Zeppelin, and Kotick's million-dollar innovation spot bonus fund, for example.