While Activision cancelled all Guitar Hero projects and shut Blur developer Bizarre Creations as part of major restructuring efforts, DJ Hero studio FreeStyleGames has been given a second lease of life, albeit with a smaller workforce.
"Over the past three months we have examined a number of options for our studio's future with Activision," FSG creative director Jamie Jackson said in a statement issued to Develop.
"Today we are excited to share with our fans and community the news that we will continue our strong partnership with Activision, with work starting on a new, innovative project."
Although Jackson didn't provide any details on the new game, he did take the opportunity to thank fans and the industry for their support.
"We'd like to thank the team, our fans, the media and the video game industry at large for their support during this period." he added.
Speaking about staff cuts, design director David Osbourn confirmed around 35 team members will be made redundant.
"We are consulting with the studio to offer tools and resources, including outplacement counselling services and career fairs etc to those employees affected," he revealed.
"Although we will be really sorry to lose members of the Freestyle Games family we have no doubt that their talents will be in high demand throughout the industry."