The Financial Times is reporting that Activision, the minds behind the Guitar Hero franchise, are working on an online music franchise to rival iTunes. Citing the fact that the company has sold more than 20 million copies of its game, totaling over one billion in sales, Bobby Kotick, chief executive of Activision Blizzard, thinks it’s a natural progression.

“I don’t think there have been a lot of credible alternatives to iTunes, but Guitar Hero certainly has that potential,” he said.

Activision recently merged with Vivendi Games (forming Activision Blizzard), and Vivendi Games owns Universal Music, so the company has that label already lined up. But in order to take on iTunes, the company would need to strike deals with most

of the major labels.

The move could be risky without an MP3 player attached to the new company, and there is no word on if the company would be developing one. The company should also be concerned that the Guitar Hero franchise has seen its market share shrink thanks to the highly successful Rock Band.

But there could be a potential boon in this for Activision; if they win the rights to the Beatles’ catalog in their fight against MTV Games, they would hold that over iTunes, as the Fab Four’s company and iTunes have yet to come to an agreement.
[Financial Times via Daily Swarm]