Earlier this week, Activision and RedOctane gave the gaming press a good, long look at Guitar Hero III: Legends of Rock for the PlayStation 2, PlayStation 3, Xbox 360, and Wii. The companies were using the event not only to show off each version of the game, but also to spotlight the Les Paul controller that will accompany the game's October 28 launch.

　　While guitar battles waged for hours at dozens of demo stations, representatives of RedOctane and the development team at Neversoft wandered the crowd, ready to answer an abundance of nitpicky questions, many of which had short, simple answers. For instance, while the PS3 is backward compatible and can technically run the first two PS2 Guitar Hero games, the new PS3 Les Paul controller won't work with those games. The Les Paul faceplates for the PS3 and Xbox 360 are interchangeable, but the Wii Les Paul needs its own unique faceplates because of the controller's design. Guitar Hero III for the Xbox 360 will not be able to backward compatible with Guitar Hero II's downloadable content packs.

　　For more involved questions, GameSpot sat down with RedOctane cofounder Charles Huang to pepper him with a variety of questions, from the basics to business models.

　　GameSpot: What criteria do you consider when choosing songs to appear in Guitar Hero?

　　Charles Huang: We have a whole committee of people who work on it between us and Neversoft. We try to cross different generations of rock, different subgenres of rock and metal. It's also tricky because we have to pick a progression from what we consider easy to hard, which most people don't think about. To end up with 70 songs like we did with Guitar Hero III, you start with a list of over 200 or 250. Then you go through the licensing process and most get rejected for one reason or another.

　　GS: How often do the musicians request certain spots in the setlist, like they want to be an encore song or they don't want to be an easy track?

　　CH: It does happen. It's happened through the whole process. On Guitar Hero III, when we went to license Living Colour's "Cult of Personality," we found that the band was actually a fan of the game. And they decided the song wasn't hard enough. They wanted it to be in the harder section, so they volunteered to go back into the studio and rerecord the song with a special solo in it so they could move further down the [setlist].

　　I think, especially with the guitar players, they prefer to be in the tougher sections. But if you think about it, if you're in the first two setlists, you get heard by more people. So we try to explain that. It's actually not bad if you're in the first setlist because you get more exposure. It's good for the band, but I think the guitarists always want to be in the last set because they want to be known as the real hardcore guitarists.

　　GS: Guitar Hero III has real-life rockers Slash, Bret Michaels, and Tom Morello in it. Just like you're switching to doing more master tracks, are you moving to a point where it will be standard for bands to license their likenesses as well as their music to Guitar Hero?

　　CH: That actually came about because Slash's manager approached us about getting involved in the game. At that time we'd never done anything like that and we'd loved to have someone like Slash involved with the game. And that was part of the integration, of how you capture being a real-life guitar hero and the essence of being that in a video game. We thought it was a major step to get not just their music, but their entire persona in the game.

　　To be quite honest, early on, we saw what EA Sports does with all their athletes, we thought it would be great to have the great guitarists in Guitar Hero if they were willing to front the game. But then we found out they were very open to not only being the cover boys for the game, but they wanted to be playable characters within the game.

　　If you think about the Tony Hawk game, that's what Neversoft does. They take all these great skateboarders and they put them and their actual tricks in the game. Having them and their history gave a lot of these artists a sense of comfort. One thing we found out about these artists is they're very sensitive about how they and their music are portrayed in games and movies or whatever. They want something credible and something real that doesn't take away from their onstage persona and their entire performance history.

　　GS: Guitar Hero was one of the first games to prove that you could be more than $60 and still be a huge seller. With the PS3 and Xbox 360 versions of Guitar Hero 3 going for $100, and Rock Band now offering a $170 package, what's the limit for what consumers are willing to invest in a single game, a single franchise?

　　CH: That's a tough question. When we first went out there with Guitar Hero, that was just on PS2. We were selling that package for $70, double what most other PS2 games were selling for at the time. And retailers told us it would never work. Part of it is you can't just go out there and assume consumers are going to go out there and pay $100, $120, $170 or whatever. You have to deliver a lot in terms of the software and the hardware.

　　I think you can always get $60 on software because that's what AAA titles do. The hardware is what you really have to convince them will be worth the money. If you look at the marketplace, the difference between a wired next-gen product and wireless is more than $10, but we priced the gap at $10. I wouldn't say you can always push the limits. It's really a fine balancing act. If you can deliver enough features, then you can get consumers to accept it.

　　It's a challenge. You saw that Rock Band recently went from $200--everybody's original guess for the bundle--to $170. That's perhaps indicative that you're really getting up there against the limits of what consumers are willing to pay. But if you deliver a great experience--look at what the Halo 3 special edition pack did--people will pay.

　　GS: PS2 game sales have been tapering off a little slower than anticipated. How much longer do you think it will be a viable platform for new Guitar Hero installments?

　　CH: It's funny you ask that. Several weeks ago I was visiting a retail partner. We had seen the PS2 sales for the year and I think versus last year, the numbers were down somewhere between 12 percent and 15 percent. But their analyst said if you were to take out the Guitar Hero franchise, PS2 software sales would be down about 25 percent. Guitar Hero II for the PS2 bundle has been in the top 10 games in NPD since its launch, and it would still be a top 10 seller if we didn't come out with Guitar Hero III.

　　We were just at TGS and I met with [SCE president] Kaz Hirai and told him that a Guitar Hero game is probably going to be the last game that's ever released on a PS2. We believe our game is a casual game, a mass market game. Every time they drop the price on the PS2, it brings in new people. And if you think about somebody that hasn't bought PS2 in year six or seven of its existence, they're really a very casual sort of gamer. A game like ours really plays to that audience. The PSone went all the way down to $50, and I'm expecting PS2 to go all the way to $50 as well, so we'll probably be the last title to ship for PS2. [Laughs.]

　　GS: How is the online play and downloadable content picture shaping up on the Wii?

　　CH: Our hope is on the Wii that we can be the first non-Nintendo title to have downloadable content, so we're working closely with Nintendo to make that happen. Given the success of the downloadable song packs on the Xbox 360, we can make it work on the Wii and every platform. Obviously, Nintendo's first-party titles will be the first out there with DLC and online play, but we're hoping to be the first third-party title with those features.

　　GS: So it won't launch with online play?

　　CH: Unfortunately it won't. But we're working with Nintendo to make it happen down the road. Things are just coming together a little bit too slow for launch.

　　[UPDATE: An Activision representative contacted GameSpot to clarify this issue. The Wii will have online play at launch, and Huang thought the question was only in regards to downloadable content.]

　　GS: Despite the sales, a lot of people were upset with the pricing for Guitar Hero II downloadable content. Will the price point and three-song packs stay the same for Guitar Hero III?

　　CH: The three-song pack is worth a look. We benchmark other music game titles, like Dance Dance Revolution has had a history on Xbox and 360 of doing different size packs, so we try to look and see how they've done. The thing about the economics of downloads that people have to realize is the artist and the labels get the same royalty payments they would on iTunes. They're comfortable with that model, so you have to give them that same cut. And Microsoft needs to get compensated for putting up and running all this Xbox infrastructure. So there's another party that takes payment and adds some cost to this. And we not only have to give the music but also build the note chart for the game, so there's development time.

　　The easiest comparison for consumers is iTunes, so they say, "On iTunes I get it for $.99; how come this is costing me essentially $2?" There's a lot of things involved with this. The labels and the artists get the same amount they would on iTunes. Then we have to do more work, then there's a third party involved--whether it's Microsoft or Sony or Nintendo--that has to get involved as well.

　　GS: Will the remainder of Guitar Hero's setlist and Guitar Hero Encore: Rocks the 80s be made available through downloadable content, either through GH II or GH III?

　　CH: Some of it we're working on trying to get out. To be honest, it's about as much work to rework a Guitar Hero 1 song--which did not have bass tracks and a lot of the multiplayer features--into something that's playable with Guitar Hero III as it is to take a new song and plug it in.

　　GS: Will you continue to support Guitar Hero II with downloadable content after the release of Guitar Hero III?

　　CH: That's another very interesting question. The thing with Guitar Hero II is that it was done completely with Harmonix and made off their code base. Guitar Hero III is done all by Neversoft. If we can work something out with Harmonix, we would love to support Guitar Hero II. On the other hand, the entire studio is busy with Rock Band. With the My Chemical Romance download pack, we were able to get them to support it for Guitar Hero II. It's on a pack-by-pack basis.

　　GS: Another complaint is that the packs weren't coming out fast enough. People wanted to give you more of their money, but you weren't letting them. How often can we see new content updates for Guitar Hero III?

　　CH: [Laughs.] There's actually a lot of songs that come out in the Guitar Hero series. If you look at a more mature platform like the PS2, we put out Guitar Hero II and then the expansion pack. If you look at that, conceivably with downloads, you're putting out a lot of songs over the course of a year. You have to pick and choose and try to find ways to figure out if people want downloadable or if they want songs on discs. And I think a lot of it depends on the platforms, to be quite honest. Some platforms have a lot of people who are more technologically inclined and online, and some platforms don't have that. [In that case] you're better off releasing those songs on disc because that's the only way to reach that audience.

　　We would like to do a lot of new downloads. Our strategy is to look at some of the more interesting things we can do. So with the My Chemical Romance pack, timing it with events like a summer concert tour--those kind of things are interesting to do.

　　There's always a debate that happens when we get those songs licensed. If we put this on DLC, then what happens to people on the PS2? They can't ever play this. It could be a question for Wii, where we'll see what percentage of the users will be online. It's very easy to say we could put it on DLC for Xbox 360 and possibly PS3, but there are other factors that come into play.

　　GS: How often can we expect to see new GH games in the future? One main game and one Encore pack every year?

　　CH: We're planning to do one expansion pack and one reiteration each year. If there are special opportunities that come along, we might look at doing that. That could be anything. We could do different territorial things, maybe Japan, European. But at minimum, that's what we'd like to do, plus the downloadable content.

　　GS: RedOctane has filed trademarks for Keyboard Hero, Drum Hero, and Band Hero. You also designed the Guitar Hero II Xbox 360 controller with an effects pedal jack that has gone unused so far. Considering Harmonix is already introducing the drum and band concepts with Rock Band, when are we going to start seeing RedOctane flesh out its plans?

　　CH: We look at a lot of interesting options for where we'll take it. One of the early trademarks we did was for Drum Hero. Our approach was to take it and make a drum game that could stand on its own. It should be fun for someone to play just sitting in a room by themselves with a drum kit, playing a game called Drum Hero. And we've put some time and effort into creating that. Now it may connect eventually to a Guitar Hero, but at minimum, we wanted people to feel that they could just buy that, and if they never played with anybody else, they could have fun playing Drum Hero.

　　GS: Another feature of Rock Band's that is not announced for Guitar Hero--as yet, anyways--is downloadable albums. What's RedOctane's position on that idea? Have you explored it?

　　CH: Downloadable albums are interesting. It's something that makes sense to labels who put out albums, because that's what they do. It's an easy business model for them to understand. From a consumer standpoint, it's a bit tougher. I think most consumers, at least most younger consumers in the iTunes generation, don't buy whole albums. They buy songs, or packs of songs. They buy individual tracks if they can.

　　And the album model, if you talk to people in the industry, [they'll say] that's really a broken business model. The whole idea of selling you 15 songs by a band on a CD doesn't work, or else they wouldn't all be losing money in that industry. The artists kind of see that. Some of the record companies are still in the business right now of selling albums, but give it another 5 to 10 years at most, and people will be baffled why you went and bought 15 songs from the same group.

　　GS: When are we going to get a little Led Zeppelin in there?

　　CH: Well now that they're getting back and playing, maybe. There have been several groups we've always tried to license that have been tough: AC/DC, Van Halen, Led Zeppelin, and Metallica. We got Metallica finally, but it took a long time.

　　GS: You got Van Halen...

　　CH: Yes, but we wanted a lot of Van Halen. What happens is a lot of the groups are--how should I say this--more motivated to do something to get their music out when they're ready to do something like a new album or a new tour. So when we heard that Van Halen was going to go back on tour, we thought this was our chance because they'll see this as an opportunity to get their music out to people, especially younger people. Unfortunately, Eddie went back into rehab so the tour never took place, but maybe if it does, that's an opportunity for us to approach Van Halen again.

　　Zep is a very difficult band to license. If you look at all of their music that's ever been done, very few people have ever been able to license a Led Zeppelin song for anything. But if their sort of reunion concert they're doing in London goes well, then maybe they'll get back together and do things. Usually when artists get back and on a roll of doing commercial things, getting out there and doing tours--they're more open to licensing opportunities. Hopefully if that happens, we'll be able to get Led Zeppelin. It's not because we haven't tried.