Slash at Activision's E3 press event

"What Activision provides now is huge muscle and know-how to take a franchise and extend it to the next level. My expectations are that 'Guitar Hero III' will remain the leader," said Dusty Welch, Red Octane's head of publishing.

EA has gained considerable attention in recent months however due to its rival music game Rock Band. The game won several awards including best game of E3 this year, while Guitar Hero III quickly took a back seat.

Guitar Hero I and II were jointly developed by Red Octane, which designed the hardware controllers, and Harmonix, which handled the actual game software. The popularity of the first two games made both development team targets. MTV bought Harmonix and began working on Rock Band with EA, and Activision purchased Red Octane to start work on Guitar Hero III.

Guitar Hero III will come priced at $80-90 dollars including a single guitar controller. Speculation suggests that Rock Band could come at a much higher $200 price including game, guitar, drum, and mic controllers.

"The music-game genre is growing explosively. I think it's plenty large to accommodate multiple franchises, more than two, really," said Harmonix co-founder Alex Rigopulos.

Both games will release this fall.