So you rocked out to “Guitar Hero II” and can’t wait for “Guitar Hero III” later this year. But what about after that, huh?

Publisher Activision’s got you covered. Chief Executive Bobby Kotick told us today that the company has plotted the course of the franchise for the next five years. Not surprising, given that “Guitar Hero II” accounted for 30 percent of Activision’s revenue in its first quarter and that it faces competition from the upcoming “Rock Band“, which is being published by MTV and distributed by Electronic Arts. We chatted with Kotick about “Guitar Hero” after Activision’s quarterly earnings report:

There’s been a lot buzz about “Rock Band”. Can you sum up what advantages you think “Guitar Hero” has against that game?    

One of best studios in the world is making this. We are launching on all platforms, we have tens of thousands of retail demo stations — more than 30,000 stations. We have an integrated publishing effort, we’re not reliant on a distributor. We own the franchise, the development property, every part of the value chain.

What kind of advertising or marketing support will you have for the game?

I think it will be the biggest marketing campaign ever undertaken for a product.     

You and other executives have talked about innovating with the game. What kind of things do you have in mind? There’s anticipation that future versions will support multiple instruments, that sort of thing.

One thing that is really nice is that we have an enormous audience to talk to and work from so we listen to them. When you look at our 3-5 year brand plan, it’s a very well-thought-through brand plan that has a whole host of innovations, things like getting local content to get greater penetration in other regions. There are a whole host of other things that, for competitive reasons, we can’t talk about right now. But it’s not hard to imagine what those might be. 

I know you haven’t announced pricing for “Guitar Hero III” but what are your general thoughts? Will the addition of wireless to the controllers add to the cost or will it be in line with what we’ve seen previously.

Pricing will be consistent with where it’s been historically.
    
I’m curious about margins for “Guitar Hero”. I’m guessing the hardware must be low margin, but on other hand, the game doesn’t rely on super-realistic high-definition graphics, so does that balance out? How does that shake out?

We haven’t gone into the margins on that, but it’s a very profitable business.

(Photo taken from Wikipedia entry on “Guitar Hero III“)

Today’s quarterly earnings report from Electronic Arts failed to mention “Spore“, the next highly anticipated game from “Sims” creator Will Wright. Last quarter, EA said it was delaying the launch of the title, which is shaping up to be the ultimate ”God game” that lets you guide the evolution of protozoa from being just another ingredient in the primordial soup to masters of a galaxy-spanning civilization.

A Wall Street analyst noticed the omission and asked CEO John Riccitiello if the game was still on track to launch next spring.

“(EA Games chief) Frank (Gibeau) and I are both dying to take the question because we’re both playing and enjoying the product a great deal, so I would say the great news is what we’ve got now is coming together as one of those break-through products that might come across the industry every three, five, seven years,” Riccitiello said.

“We could not be more bullish about the potential for the franchise than we are right now. Right now, as we mentioned in our call the last time, it is sort of squarely targeting against March, April, May of next year. Intellectual properties like this and games like these are so large and so complex that we chose not to put in our fiscal year guidance because these days are pretty hard to predict, and the outcomes can be volatile. We will make the choice of shipping a better game than an on-time game given the high potential for this franchise, so our best guess right now is Q1 of next fiscal, but we’re not actually providing guidance for next fiscal at this point.” 

Other games singled out by executives were “Rock Band“, which was cited as a key reason behind EA’s increased revenue forecast for the year, and “Madden NFL 08“, which based on buzz may be the strongest showing in years for the long-standing franchise.

EA Games chief Frank Gibeau: “In terms of how preorders are tracking with Madden, we’re about two weeks out from our street date, and we’re feeling really good about the momentum behind the title and the launch. We believe the product quality is extremely high and the buzz right now based on how we’re reading the market is tremendous. We won best sports game at E3 which we think will help give us a boost over the finish line. We’re on track to deliver well north of over half a million preorders, and while we don’t get too specific on the exact total, we feel really good about that number and it is going to be the biggest launch of the year so far.”

(Photo taken from Wikipedia entry on “Spore”)

What does a bona fide guitar hero do in his spare time? Play the Guitar Hero video game, naturally.

Slash, the top-hat-sporting former axeman for rock legends Guns N’ Roses, says his passion for the popular music game led to a deal with publisher Activision that features him in the franchise’s upcoming third installment, called, appropriately enough, “Guitar Hero III”.

“Funnily enough, I got hooked on ‘Guitar Hero’ in a tour bus and I just fell in love with it,” Slash said at Activision’s media briefing at E3, the video game industry’s annual trade show.

“I guess at some point our merchandisers and our manager had discussions about stuff I might want to get involved in and ’Guitar Hero’ was one of them,” said Slash, whose day job is lead guitarist for rock band Velvet Revolver.

A deal was quickly worked out to feature Slash in the game as a ”boss” who challenges players to a guitar-shredding face-off. Slash also wrote and performed the theme song for the game, which is scheduled to hit shelves ahead of the holidays.  The songlist includes G’N'R’s “Welcome to the Jungle”, Velvet Revolver’s “She Builds Quick Machines”, “Paint it Black” by The Rolling Stones and “Even Flow” by Pearl Jam.

“It’s pretty heavy, pretty loud, all the things ‘Guitar Hero’ is. It’s got a very addicting quality to it and anybody who knows me knows that applies to me. Out of all the things I’ve been involved with, other than being in a band, this is definitely the coolest.”

(Photo: Slash’s Official Fan site)

With the video game industry’s annual trade show officially kicking off on Wednesday, Reuters sat down with Mike Gallagher, the new head of the Entertainment Software Association. As the chief lobbyist for an industry blamed for making the world’s youth slothful and even murderous, Gallagher will need to call on every bit of the diplomatic and negotiating skills he developed as an assistant secretary of commerce and as a telecommunications lawyer.

Read on to hear why Gallagher thinks games are a vital piece of America’s entertainment scene, how misunderstanding of games spans the political spectrum, and why gamers should learn from ham radio operators.

Q. What drew you to this job? Why video games?

Gallagher: What attracts me to this industry, first of all, is that I use the products. I have a fascination and curiosity and enjoyment with the titles that goes back a long way. I have two kids, 13 and 11, so it’s second nature for me to have excitement for what this industry is about and that’s great games.

When I worked on the 1996 telecoms act, there were a number of dream scenarios and of course it turned out to be different than what they predicted. That term “convergence” is happening right now in video games. Now you have movies and music and video coming together in one place and the one place where it is richest is video games.

Q. What are your biggest challenges, the one or two biggest problems you want to tackle?

Gallagher: I’m being real careful because the first thing I need to do is listen, and I need to listen a lot and listen carefully to industry members and stakeholders. I have been in a 6-week cram session since I came aboard to learn all about the industry, whether it’s the business side, the member companies which all approach the market very differently.

They all have different histories, different expectations, different theories about what’s going to drive growth in the market. For example, you look at the Nintendo Wii, they are all about expanding the market, bringing in new video-game players. Whereas Microsoft, they’re for that too, a bigger market, but they are about driving the richness of the experience. You look at the investment in the technology and platforms and it’s reflected there. One’s a very hi-def, surround-sound experience … and the other one is definitely targeted to price, ease of use, right out of the box it’s intuitive what to do.

One thing, and it’s an asset for this industry, is what a tremendously passionate consumer base there is. Video game players love video games and they love to blog about them and write about them and talk about them. They are tough critics but they are very active and one of my goals will be to rely upon and turn that energy into the policy environment so that members of Congress and other leaders in government positions know the true metrics of the industry. And that is that the average video game player is 33 years old, that they’ve played for an average of 12 years, that the average video game purchaser is 40. So we’re not talking about 13-year-olds in dark rooms. It’s much broader than that and it is a rich part of our country’s entertainment experience. I want to do everything I can to create an environment for growth for this industry, where policymakers embrace video games, and what they bring instead of the more recent pattern, which has been to pick on them for false stereotypes.

Q. You mentioned this passionate fan base. One thing that separates the ESA from other lobbying organizations is that video gamers really see you as their champion, not just for the companies but for gamers. Whereas, say for movies, movie-goers don’t necessarily view the MPAA as their advocate.

Gallagher: When I was on the Hill, in the administration, in the spectrum space, the radio frequency spectrum, there’s a group of users called the ham radio operators, or the amateurs. There are 800,000 of them in the United States, that’s all. And it’s a technology that is very much rooted in pre-World War II. They are passionate, they are heard and they are accommodated. If there is one group to look at and say it can be done, simply look at the amateur radio community. They are very, very effective in Washington D.C. at making sure that their use of the radio frequency spectrum is protected. Every member of Congress has them in their district, all of them vote, all of them write letters and they are a very loud group.

Well, two-thirds of American homes have video-game players in them. Two-thirds of American families are playing video games, and a fair number of those are very energized about it. That’s a much greater number than what other groups have, and we look forward to activating that and informing that group about what is happening so they can in turn focus that energy where it needs to be applied, which is back at their elected representatives and appointed representatives.

Q. How do you face the political challenge? Games, fairly or unfairly, come under fire from both sides of the political spectrum. Republicans are seen as more socially conservative, yet some of the harshest critics of games are Democrats. How do you tailor the message for both political parties?

Gallagher: By being ruthlessly bipartisan. Our industry has succeeded when we’ve been bi-partisan in the past. My background is completely bi-partisan. I’m an identified Republican, proud to be a Republican, I’ve worked in a Republican administration. But the member of Congress I worked for came from a toss-up district, and that tempered my view of politics and how to approach it.

It’s by being ruthlessly bi-partisan, by appealing to both, making sure I’m informing both parties about the merits and strengths of video games, and also it’s really telling them, capturing the imagination of the policymakers about where we’re going, because it’s so different than the stereotypes that they are operating off of with some of these bad ideas. Those ideas appeal to both the right and the left and we’re going to make the case to both sides.

It’s not necessarily the EAS doing it, it’s the magic of the products of this industry, the titles that are produced, the storytelling capabilities, the technology. There’s no one putting more technology, higher technology, in the American home than this industry. There’s no one doing more to drive broadband growth than video games. PriceWaterhouseCoopers says 25 percent of broadband users at the end of the decade will be using video games. We’re a driver for that. Broadband is a national policy goal, it’s a competitiveness issue and video games are squarely in the mix of driving that. Also, for California and other places that welcome video games, it’s a job engine.

Q. In terms of policy then, where are your efforts going to focus? Is it more in trying to thwart bad law that would ban or restrict games, or how do you create this environment of growth? We don’t have a video game czar or Ministry of Entertainment.

Gallagher: Thank God we don’t! We really don’t need that as a country. I’ve done scores of international meetings with other countries that have these ministers of culture. Boy, what a mistake that is. But that’s the way they’re designed and we have to work with them. Here are two things we have to focus on policy-wise, I’ll give you three things.

One is, we are making huge investments in intellectual property and the government should make sure we have laws and enforcement capabilities that respect that. When it costs an average of $20 million to make a rich video-game experience, we need to see that investment protected.

Two is, we need to make sure we’re opening up new markets for our products, and that the U.S. government is doing everything it can to enable creation of those opportunities. We’re moving towards, according to PriceWaterhouseCoopers, three out of four sales dollars coming abroad, as a macro-issue for the industry. We need to make sure those markets are open and available and profitable for our companies here.

The third one is we need to make sure that the content of video games is on an even footing with books, magazines, movies and other types of media and not singled out unfairly based on false stereotypes for criticism or legislative abuse. It’s about creating that environment for rich growth for the industry, that’s the macro goal.

This industry is relatively unique. It’s much more high-tech in the sense that high technology does not often go to Washington D.C. with its hand out asking for something from government. Really, we’re asking for the freedom to create, the freedom to write great software and then the freedom to sell those products and that game experience and tell those stories to multiple markets. That’s what this industry is about.

Apple’s iPhone has been out in the wild for a full day now, so we checked in with a handful of buyers to get their impressions.

One key question was about the activation process, which has been less than smooth for some people. An AT&T spokesman Mark Siegel said while there had been some hiccups, the activation process had worked great for the vast majority of people, a statement echoed by Apple spokeswoman Jennifer Bowcock.

Of the 11 people contacted by Reuters, two said they were completely unable to activate their phone despite repeated attempts. Another person was delayed for more than an hour trying to transfer his old phone number from a pre-paid AT&T account, but got his iPhone working when he just signed up for a new number. The rest reported no hitches.

David Clayman, the third person in line at Apple’s flagship store in Manhattan, said the phone he bought for his father refused to activate.

“My dad’s doesn’t work. It’s not activating. It’s just not functioning properly. That kind of bothers me because I waited in line for 100 hours,” Clayman said.

Clayman said a second phone he bought to auction off for charity hasn’t been opened yet but he’s worried that activation problems could sap its value. You can track his progress on his blog.

Brad Bargman, a 40-year-old magazine publisher in Ft. Lauderdale, said the whole reason he waited 9 hours in line to buy an iPhone was to be among the very first people to show it off. But after going through the set-up process, he waited for the activation e-mail from AT&T. And waited, and waited…

“It’s a real buzzkill,” said Bargman, adding that repeated calls to AT&T’s help line failed to get the device to work. “The lady said to me, ‘This is happening to everybody’. I know it’s not happening to everybody because I know people whose phones are working.”

Private detective Jerry Gregory, 45, waxed enthusiastic: “It’s awesome, best thing I ever saw in my life.”

“Typing e-mail’s really cool because it’s a really unique keyboard. It doesn’t make a lot of mistakes. I have a Blackberry 8800, it’s really high tech and I love it, but this thing blows it away. The ease of it. 

“The Web surfing’s great. The Wi-fi is great, just like a computer. When I tried it on AT&T’s network of course it’s slower but it’s comparable to those PC cell cards.

“My buddy even dropped it on a tile floor from like chest height. It didn’t even break, no crack, no nothing. The only thing is that it’s so beautifully made, so sleek, everything is exactly what they said, but it’s almost a little too sleek, so you’re fragile with it when you’re holding it.”

Tyler Martin, who is building a social media networking site, said he had trouble trying to transfer his previous AT&T number from a prepaid account.

“The problem is that AT&T is not really equipped to transfer a number from their pay-as- you-go plan,” Martin said, adding that his iPhone was great once he got a new account set up.

“It’s really life changing in a lot of ways. All of a sudden you have access to your e-mail all the time. The fact that it connects to Wi-fi wherever it’s available is phenomenal.

“There’s no end to the features. I’ve been playing with it for four hours and haven’t played with them all. I don’t have any music or photos loaded.

“There’s no text copy/paste feature. It would really be nice to have that, then I could really do all of my work on my iPhone. I wish the EDGE network wasn’t quite so slow. 
     
Andrew Velis, 21, a computer science student at the University of San Francisco, said it took less than 15 minutes to get going: “One of the first things that really just took me by surprise was the size of the screen and the clarity of the picture.

“I put it to work right away, went online to the maps thing and found a friends place where I’d never been before and the maps took me right there.

“I know I can take pictures but I can’t take video. I’d say that’s probably the only (bad) thing, but it’s getting picky if you ask me. The keyboard actually took a little getting used to because I have big fingers. I kept pushing the key to the right or left of the one I wanted. But it gets easier.”

Tim Brown, a software developer, said the setup was the simplest he’d ever done.

“I’m a geek, so the Wi-fi and the call quality has been excellent. It seems to pick up a signal a bit better than before, it doesn’t drop in an elevator. It’s nice to have the two devices (iPod and cell phone) in one form factor.

“We were mucking around with Google Maps last night. I did some surfing with Wi-fi and EDGE to see how it compared. I’d used EDGE before so it was what I expected. I check my Gmail and that’s about it.

Stanford university student Todd Laguardia: ”It’s probably one of the best products I’ve ever had. I had no problems at all (with activation). If there’s one thing I like about it, it’s the size. It’s amazing how something that small has so much packed into it.”

Mobile business consultant Dale Larson waxed rhapsodic when asked for his impressions of the iPhone: ”I’m kind of amazed. I thought I knew what to expect. I’m kind of blown away that it’s really kind of even easier than I thought it might be, and it’s even more fun and beautiful than I thought it might be.

“It’s easy as heck to take it home, open it up, plug it in … it’s completely unlike any other experience buying a phone. To actually use the thing, it really has made it a joy.

“It’s all the little things. I don’t miss the tactile feel of a keyboard since I have such rich visual cues and audio cues. It’s not like it’s a computer, it’s not like it’s a phone, it’s like a living sculpture in my hands.”

Rockstar, the video game developer with a penchant for stirring up controversy with titles like “Grand Theft Auto” and “Bully”, has done it again. This time, the studio’s psycho-killer game “Manhunt 2” is in the spotlight over a level of violence that has proven too intense for censors in Britain and Ireland, and which garnered an “Adults Only” rating from the U.S. game screening group. Here is a roundup of comments from interested parties.

Take-Two Chairman Strauss Zelnick: “We firmly believe that parents and consumers, once informed as to the nature of any entertainment product, should be able to make their own choices. The Rockstar team has come up with a game that fits squarely within the horror genre and was intended to do so. It brings a unique, formerly unheard of cinematic quality to interactive entertainment, and is also a fine piece of art. I stand behind it fully.”
 
Sony Computer Entertainment: “Currently it’s SCE’s policy not to allow the playback of AO-rated content on our systems.” 
 
Nintendo: “Games made for Nintendo systems enjoy a broad variety of styles, genres and ratings. These are some of the reasons our Wii and Nintendo DS systems appeal to such a broad range of people. But as with books, television and movies, different content is meant for different audiences. That’s why the ESRB provides ratings to help consumers understand the content of a game before they purchase it. As stated on Nintendo.com, Nintendo does not allow any AO-rated content on its systems.”

Ireland Film Censor John Kelleher: “A level of violence is acceptable in certain contexts in cinema, in DVDs, or in video games. But there is no context in this one other than killing. It is non-stop, it is constant, it is visceral. People are killed in every possible kind of way.”

British Board of Film Classification Director David Cooke: “‘Manhunt 2′ is distinguishable from recent high-end video games by its unremitting bleakness and callousness of tone in an overall game context which constantly encourages visceral killing with exceptionally little alleviation or distancing. There is sustained and cumulative casual sadism in the way in which these killings are committed, and encouraged, in the game.”
 
Entertainment Software Rating Board President Patricia Vance: “The ratings assigned by ESRB are based on the consensus of our raters, who consider several factors including not only the content itself, but also elements such as the reward system and degree of player control.  It should be noted that this is not the first time that an AO rating has been assigned for violent content, nor will it likely be the last.  However, our system affords publishers the opportunity to modify and resubmit games that receive the AO rating in light of the business ramifications that such a rating currently presents.”

Wedbush Morgan analyst Michael Pachter: “I can’t imagine it’s significantly more violent than the last one. I think Rockstar has kind of has been singled out because they have this reputation for doing this edgy stuff. But again, you’d think because they’ve been singled out in the past, they’d be more circumspect in putting this stuff together.

“This is one of the tasks ahead of new management, to rein in that creative talent and tell those guys we are in the business of making money and you should make games that will sell, not games that are artistically beautiful but not available at Wal-Mart.

“Take-Two is going to have to rework the game. I think if it has an AO rating the sales will be cut in half. I had the game doing $40 million in revenue, so it will do $20 million. If they rework it will do $35 million, because of the delay and because people will probably think it’s a scaled-down version, and it will cost them a couple million to rework.”

Campaign for a Commercial-Free Childhood spokesman Josh Golin: “We are extremely pleased that the ESRB agreed with us that ‘Manhunt 2′ deserved an AO rating, and we hope that they hold firm in any appeals process. Based on how violent this game is, with experienced game reviewers calling it the most violent game they’ve ever seen, it’s difficult to see how Take-Two can change this is in a way to make it not worthy of an AO rating.”

Scott Steinberg, vice president of marketing for Sega of America, caused a bit of a stir with his remarks questioning the long-term appeal of Nintendo’s Wii video game console.

In an interview with Reuters Thursday, Steinberg said Sega was still expecting that Sony’s PlayStation 3 would end up with more market share against the Wii and Microsoft’s Xbox 360. He also wondered if the Wii’s motion-sensing controller would lose appeal down the road.

The comments were interesting because game publishers and media have been going ga-ga over the Wii’s success. They also inspired a spirited debate on several gaming blogs, with some commenters defending Steinberg’s views as right on the money and others suggesting he doesn’t understand the degree to which the Wii is changing the industry.

Sega, alarmed at some of the negative commentary, sent over additional remarks on Friday noting that the company was one of the earliest third-party supporters of the Wii and has announced seven Wii titles in the works and “many more” in development. 

Steinberg: SEGA has fully supported the Wii since day one and we continue to do so its no secret that we are close partners. Nintendo has done a masterful job of selling its vision and expanding the market. That said, its a shared responsibility and opportunity for the whole industry to take advantage of the possibilities of the Wii. If we dont realize its true potential, we will have missed a great opportunity to expand creatively and that is what I was cautioning against in the Reuters interview. Im not just putting the responsibility of innovation on Nintendo. Its on SEGA and all the publishers and developers as well to carry that flag.”

Sony’s U.S. video game division has launched a blog, a new public relations strategy that gives all of its employees the power to talk to gamers directly.

The new effort follows a string of PR missteps such as an astroturf scandal late last year stemming from a Web site purportedly made by two guys pumped up about Sony’s PSP handheld gaming device. Gamers quickly discovered the truth: the site was created by a marketing agency with a misguided sense of cool to promote the PSP ahead of the holidays. The company also caught some heat around the appearance last year of ThreeSpeech, a “semi-official” Web site that turned out to be backed financially by Sony Computer Entertainment UK.

Blogging has been an important part of Microsoft’s strategy to relay information about its Xbox 360 console and online service, with employees running popular sites such as Major Nelson, Ozymandias and Gamerscoreblog.

Sony’s new effort is no mere toe in the water. Dave Karraker, head of Sony Computer Entertainment’s U.S. PR team, said the company spent 6 months getting the format right and then sent out a company-wide memo encouraging all employees — from hardware engineers to game testers — to post material, which will of course be reviewed to make sure corporate secrets are not exposed.

Karraker: “The main thinking about it is to get closer to the gamer and to provide them with information and content directly from the company so they don’t have to wonder about speculative reports. It’s a must-have in terms of communicating with the gaming world. This is where everyone’s getting their information.”

In a further sign of openness, Sony is also allowing comments, though they will be checked for offensive language. Sony bloggers are encouraged to respond to the reader remarks, Karraker said.

Judging from the 290 responses posted so far to the introductory entry, Sony is making good on the idea of open dialogue. Most commenters praised Sony for finally blogging, but some took the opportunity to complain about the PS3’s high price or relative lack of must-have games.

In Microsoft Corp.’s wildly successful “Halo” video games, players try to save humanity from aggressive aliens. Now the software giant is getting involving in games dealing with an issue many view as more pressing, if less spectacular: global warming.

Microsoft’s involvement comes amid growing interest in so-called “serious games” that attempt to raise awareness of issues such as energy use, famine or Middle East conflict through video games. The contest is being announced at this year’s Games for Change expo.

As part of that event, Microsoft is sponsoring the “Xbox 360 Games for Change Challenge” in which college students around the world will use hobbyist game-making tools for the company’s home gaming console to make titles based on global warming.

“The goal is to educate and entertain people who play it. There is no specific storytelling, but it will use imagination to try to raise awareness and participation in the issue of global warming,” said Jeff Bell, Microsoft’s vice president of marketing for interactive entertainment.

Microsoft hopes its clout as the world’s biggest software company will spark more interest in such games, which have typically been created by students, aid organizations and independent developers.

“I do believe this is the beginning of a radical new and exciting phase for the gaming industry. This is not going to replace “Halo 3″, it’s not going to replace “The Sims” or “World of Warcraft”, but it will open up more thematic games or even create new genres,” Bell said.

The winner will be chosen in August 2008 and Microsoft promises cash prizes to the best entries. The final winner will also get a chance to intern at the company’s games division and will also have a shot at making the title available to the millions of Xbox 360 owners, who use the console’s online network.

“We wouldn’t rule out trying to provide an environment like Xbox Live Arcade where these games would find their way into the public eye,” Bell said.

For gamers, it seems that when it comes to rocking out, money is no object.

When Activision, publisher of the hit “Guitar Hero” franchise, announced in April that it would start selling additional songs for the game through the online service for Microsoft’s Xbox 360, the initial excitement of fans quickly turned to distress at the pricing: a three-song pack cost $6.25. Moreover, the nine tracks on offer were ones from the first “Guitar Hero”, which wasn’t available on the Xbox 360. Fans who crunched the math complained that at those prices, it would cost nearly $100 to buy all the songs Activision is able to sell for $40 in the version for Sony’s PlayStation 2. 

But it seems that many would-be guitar gods grudgingly opened their wallets anyway. Activision, which reported its quarterly financials on Thursday, said it had seen more than 200,000 “Guitar Hero” downloads in the seven weeks the content has been available on Xbox Live. That would indicate a fairly high portion of players are downloading tracks. May sales figures aren’t out yet, but Activision sold 197,000 copies of “Guitar Hero 2″ for the Xbox 360 in April.

Michael Griffith, chief of Activision publishing, said on a conference call:

“Downloadable content for ‘Guitar Hero’ has been strong. We continue to get more experience overall with downloadable content and micro-transactions.

It continues to be a small part of the revenue model, but it is growing. We did $10 million, we should double that to $20 million this year, and ‘Guitar Hero’ will be a big part of that.”

Griffith and other executives waxed optimistic about the future of the franchise, citing its success as a reason behind a more optimistic revenue forecast. The next installments of the game include a 30-song collection of 1980s tunes for the PS2 and “Guitar Hero 3″ hitting the 360, PS3 and Nintendo Wii in time for the holiday season. Griffith said Activision had signed up multiple manufacturers to make sure there were enough guitar controllers to go around, and that there would be a “full selection of downloadable content”.

“We feel like we’re just getting started. Consumers seem to have an insatiable appetite for more songs, whether that’s through additional games or downloadable content.”

Asked about expected competition from Electronic Arts, which plans a game called “Rock Band” featuring drums, a microphone, guitar and bass later this year, Griffith said ”Guitar Hero” would still thrive due to its brand, support from retailers, rock-solid supply chain and new innovations.