Activision Bets Heidi Klum Stripping Will Sell You $200 Guitar Hero

Activision (ATVI) probably knows they are in trouble this holiday season. Though they will undoubtedly rake in a solid 12 million or so in sales for the newest expansion of World of Warcraft, that isn't going to be enough to meet the lofty $3.2 billion dollar revenue expectations of the street this year. For that, they need to sell a lot of console games, and they've made a huge bet on their newest installment of Guitar Hero, which may go down as one of the worst business decisions of the year.

First of all, this year's Guitar Hero is copy-catting EA's Rock Band, a big-time winner last year, into the full band version of musical rhythm games with Guitar Hero World Tour. The game, like Rock Band, will include the ability to play drums, two guitars, and sing karaoke on a microphone... which are all a ton of fun. However, people willing to shell out big bucks on stuff like this have already done so, last year, when they bought Rock Band. And, of course, the economy has also been completely trashed, so spending $200 to start a toy band seems somehow much less appealing than it did a year ago (trust me, I know this first hand).

To compensate for a not-so-innovative product, coupled with a horrible economic environment, Activision is buying into the Apple School Of Marketing, and throwing a butt-load of marketing dollars at the problem.

So far, I've seen three versions of roughly the same commercial, which involves a toy-band version of Tom Cruise's underwear and Ray Bay "Wayfarer" product placement ad from the movie Risky Business. The first one of these ads was a downright winner, and surely a classic. Not because it had Tony Hawk, Michael Phelps, Alex Rodriguez and Kobe Bryant all in the same ad (can you say "most expensive ad ever!!!?"), but mostly because Kobe Bryant takes karaoke REALLY freaking seriously, and it is impossible not to crack up while watching it. Observe:



See, pretty good stuff, right?! Oddly enough, this only has like 30,000 views on YouTube, even though it has been out for a couple weeks. Of course, dudes who buy video games and scour the internet for interesting content (i.e., pictures of girls), don't necessarily want to see a bunch of world-class athletes playing video games in their underwear (to each his own). So, this week Activision launched their secret weapon, Heidi Klum.... in alternate chromium covers!

In the less slutty version, she wears a shirt and dances poorly with a toy guitar.
In the sluttier version, she takes off her shirt, and dances poorly with a toy guitar.

As you can probably guess, the 2nd version (or the Director's Cut, as the marketing tools are calling it), has over 300,000 hits in the few days it has been up. I guess that means that the ad wizards have won, though I still think that when Activision has to resort to supermodels in undies to sell us video games, product sales are in trouble.

When Activision reports their earnings today, expect sales to be below expectations. Expect guidance also to be below expectations (though delivered with a tone that sounds like everything is super-awesome in video game land). Expect executive arrogance to be well above expectations... And tomorrow, expect ATVI stock to hit a new 52-week low.