A statement from the company said that it will "disband" its Guitar Hero division and scrap development on its planned release for 2011.
The firm will also cancel True Crime: Hong Kong, which was scheduled for release on Xbox 360, PlayStation 3 and PC later this year.
"Due to continued declines in the music genre, the company will disband Activision Publishing's Guitar Hero business unit and discontinue development on its Guitar Hero game for 2011," read the statement.
"The company also will stop development on True Crime: Hong Kong. These decisions are based on the desire to focus on the greatest opportunities that the company currently has to create the world's best interactive entertainment experiences."
However, Activision has revealed an increase in net profits to $4.5 billion (£2.79 billion) in 2010, making it the number one publisher in North America and Europe.
Earlier today, a report from Eurogamer had said that Activision was to kill off the Guitar Hero franchise and hit DJ Hero developer Freestyle Games with severe redundancies.