Activision shuts down RedOctane, Underground Development

Activision wasn't done after yesterday's round of layoffs. Kotaku reports that RedOctane, the former music game peripheral company that originally published Guitar Hero before being purchased by Activision in 2006, has been shut down, with only the staff directly involved with instrument development remaining at Activision.

In addition, Underground Development (once called Z-Axis), who worked on Guitar Hero Van Halen and the Dave Mirra Freestyle BMX series, has been shut down completely, the site reports. An Activision rep confirmed the news, telling Joystiq that "As part of our overall strategy to release fewer SKUs for Guitar Hero in 2010 we are closing the Underground studios and relocating RedOctane to our Santa Monica headquarters under the leadership of David Haddad." We didn't realize there would be such an immediate and drastic downside to Activision's plan to tone down its music game releases.