Pre-E3: Activision Acquires RedOctane In Surprise Move

In an extremely surprising pre-E3 announcement, major publisher Activision has swooped to acquire video game publisher RedOctane, Inc, the publisher of the riotously popular Guitar Hero franchise. According to the company: "This acquisition will provide Activision with an early leadership position in music-based gaming, which the company expects will be one of the fastest growing genres in the coming years." Under the terms of the agreement, RedOctane will become a wholly owned subsidiary of Activision and the company's management team and key employees will sign long-term employment contracts with Activision. RedOctane will continue to be based in Sunnyvale, CA. Financial terms of the agreement were not disclosed, but Activision does not expect that this acquisition will have a material impact on its fiscal year 2007 earnings outlook. Though Activision is buying RedOctane, it has not acquired Guitar Hero IP creator Harmonix, previous makers of music games including Frequency, Amplitude, and Karaoke Revolution - but since RedOctane is the IP's owner, and presumably enjoys a cordial relationship with Harmonix, Activision has obviously chosen to swoop for the commissioner before considering whether to look at the developer. Mike Griffith, President and CEO of Activision Publishing, Inc., commented: "Activision's well-established worldwide distribution capabilities coupled with the strength of the Guitar Hero franchise, places us in a position today to capitalize on the millions of current-generation systems in the market. Just as we lead the industry in making music an integral part of the game experience, we will now be making music itself a game, which is appealing to audiences all around the world."