RedOctane, a former music game peripheral company, originally published Guitar Hero before being purchased by Activision. Only staff involved in instrument development will remain in the employ of the studio.
Underground Development's credits include Guitar Hero Van Halen and the Dave Mirra Freestyle BMX series. The development house has been closed down completely.
Speaking to Joystiq, an Activision rep confirmed the news. "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."
Mass layoffs at Activision's Radical Entertainment and Neversoft studios have also been reported.