Activision noted that Budcat is working on "a new game in the Guitar Hero franchise," which could be Guitar Hero Modern Hits, Guitar Hero: Metallica, Guitar Hero: Jimi Hendrix, or an as-yet-unrevealed entry. Activision previously stated its intent to triple its annual Guitar Hero releases by 2010.

Budcat joins Activision's growing stable of Guitar Hero-capable studios, which includes Neversoft (PS3 and Xbox 360), Vicarious Visions (Wii and Nintendo DS) and the recently-acquired FreeStyleGames, which is working on Guitar Hero downloadable content. In addition, FreeStyle is working on a new franchise rumored to be DJ Hero.

"In addition to strengthening our development capabilities on the Nintendo platforms, this acquisition increases our Guitar Hero development resources as we continue to grow the franchise and expand our global leadership position in the music-based genre," said Activision Publishing CEO Mike Griffith.

"We are thrilled to partner with Activision and believe that this acquisition is a perfect fit for both companies," added Budcat general manager Jeremy Andersen. "Their world class sales and marketing support coupled with best-in-class execution across all areas of their business means that we can focus our time and resources on what we love and do best -- creating great games."

Financial terms of the acquisition were not released, though Budcat will remain in Iowa City, Iowa and become a wholly-owned Activision subsidiary, with its management having signed "multi-year employment contracts with Activision Publishing."