Janco: Guitar Hero To Add New Instruments In 2008

As part of its coverage of Activision's forthcoming first quarter earnings, analyst group Janco has said it expects Guitar Hero will counter MTV/Harmonix's forthcoming Rock Band by adding its own additional instrument peripherals at some point in 2008. Ahead of the publisher's August 2nd earnings report, Janco says that despite greater competition for some of its core franchises, Guitar Hero, Tony Hawk, and Call of Duty 4 will all perform strongly this holiday, and that earnings performance will outperform expectations. It has said that Spiderman 3, Shrek 3, Transformers, Guitar Hero II, Tony Hawk, Call of Duty 4, Enemy Territory: Quake Wars, Bee Movie, and Hot Wheels will be Activision's strongest holiday performers, with the possibility for a record sales in fiscal 2008. Janco adds, though that it remains concerned for its fiscal 2009 growth with EA's Skate and Rock Band pushing for more marketshare. On Rock Band specifically, Janco sees the Guitar Hero competitor creating "a compelling option for the music oriented category beginning in holiday ’07, which will pressure Guitar Hero’s growth." "That said," says the group, "we expect Guitar Hero to follow a natural product evolution by adding additional music peripherals in CY08." "Importantly," Janco adds, "the Guitar Hero franchise that is developed internally and owned, offers a meaningful operating margin expansion potential versus Rock Band, which is purely a distribution deal for [Electronic Arts]."