'Guitar Hero' amps up for the holidays

Dan Rosensweig, CEO and president of Guitar Hero

"DJ Hero," a new game in the "Guitar Hero" franchise

From "DJ Hero:" DJ Jazzy Jeff

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NEW YORK (Fortune) -- It's been a busy few years for Dan Rosensweig. As president and CEO of the Guitar Hero division of game publisher Activision Blizzard (ATVI), he's watched the music-genre video game industry explode.

When the first "Guitar Hero" video game came out in 2005, it was hailed as an innovation triumph: Users were able to play real songs, real chords, and an almost-real guitar, integrating music, interactivity, and gameplay in a way that the industry hadn't seen before.

This holiday season, the company's rolling out a suite of new games that it hopes will be equally transformational, including the latest expansion of the wildly successful "Guitar Hero," a more family-oriented "Band Hero," and a new title that's sure to stir waves in the gaming community -- "DJ Hero."

That doesn't mean "Guitar Hero" hasn't been feeling the pressure. September sales of the newest competitor "The Beatles: Rock Band" -- released with great fanfare on Sept. 9, 2009 -- beat "Guitar Hero 5," according to market research firm NPD Group.

On NPD's list of September bestsellers, "Guitar Hero 5" came in No. 9, trailing such games as "The Beatles: Rock Band" (No. 5), "Madden NFL 10" (No. 3), and shooter "Halo 3: ODST" at No. 1. Not exactly an auspicious start to the holiday season for Rosensweig.

But he isn't fazed. Fortune sat down with Rosensweig to talk about expanding the "Guitar Hero" franchise, the company's plans for mobile content, and why he's confident that "Guitar Hero" won't just thrive -- it'll rock.

What games should players be expecting this year and after?

"Guitar Hero 5" is out, so they know what to expect [from that]. It's our most highly rated game ever in the "Guitar Hero" franchise. People are very excited about the more social aspects of the game. Our strategy and philosophy going forward is to continue to expand the brand to the areas that consumers are most excited and interested in.

"Guitar Hero 5" is focused on fantastic guitar music that is really fun to play. "Band Hero" is focused more on family and more recent music. The release we have coming out Oct. 27, which we think is the music game that will invigorate the industry, is "DJ Hero."

"DJ Hero" is a turntable; it's really cool. It's got 100 songs and 94 mixes that no one has ever mixed before. This is going to be one of those transformational games. You have this generation's iconic piece of equipment -- the turntable -- and some fantastic mixes that really give you a chance to release your inner DJ. I think that's going to be one of the hottest selling games this holiday season.

Is there going to be a strong push for mobile?

We're going to focus on making sure that our consumers can access games wherever it makes sense for them to access it -- mobile is one of those environments which is always with you. And obviously, we're taking a look at that.

How has "Guitar Hero" done since "Rock Band" came out on the scene?

In any growth category, competition helps. It makes all parties make better games, which is why "Guitar Hero 5" is our best "Guitar Hero" game ever. It has gotten better reviews than any of our market competitors. The fact that we have to continue to compete is a good thing for fans, and artists. And we are very prepared to compete.

So have sales dropped because of "Rock Band?"

I think it's hard to know. You can't know what might have been had it actually been. The road not taken is not one to focus on. The one to focus on is that we're a competitive market place and we produce fantastic games that consumers love and sell incredibly well.

What about the criticism that you're just coming out with "Band Hero" to stay on the pulse of things -- that it's basically going to be the same thing as "Rock Band?"

I think we have to get the chronology right. "Guitar Hero" came out first. And "Band Hero" is completely different [from "Rock Band"]. "Band Hero" is a logical extension [of "Guitar Hero"].

The experience itself is much more family and much more social. I think we continue to be innovators in the category, and I think that's why we've had continued success.

Some critics have said that "Guitar Hero" has oversaturated the market. What are your thoughts on that?

All I can do is look at the numbers. At the end of 2008 -- and I think at the end of 2009 -- the second-largest video game category is going to be the music genre. And I think Guitar Hero could be the largest music-genre video game franchise.

Obviously, with "Band Hero," you're trying to hit that family demographic. Is this a demographic that you're going to be concentrating on more in the future?

I think we ought to be focusing on what our consumers want. A very large group really wants great guitar music, and they don't want us to confuse that.

And there's another group of people who love that, but also love to have more current music, more family music, music more popular for girls -- 30% of our players are already girls, and we want that to grow. One of the great things about having a franchise like this is you can really meet all kinds of consumer demand.

Looking ahead, what do you think are going to be the biggest challenges for "Guitar Hero?"

Like anything else, we have to continue to remain fresh. You have to really understand that technology makes the game more interesting, more expansive, and more fun.

I think we have an opportunity to redefine the way people interact with music. They want to listen to music, they want to play music, they want to contribute music, they want to create music. The more people and consoles are connected, the more opportunity we have to remain in consumers' lives.