Sad, but not surprising that they couldn't make this work:

When the original Guitar Hero was released in 2005, the innovative game rocked the video game business like a hurricane. (O.K., enough with the obvious lyrics references.) Here, for the first time, was a game that let players, if not actually make music, at least feign the experience of jamming out in their living room. Soon after came the Rock Band games, which went beyond Guitar Hero by allowing multiple people to evoke music together with representations of various instruments, and the DJ Hero series, which focused on hip-hop and electronic music instead of more traditional guitar rock. 

But even as music games have remained popular with players, the business has struggled mightily. The problem for the publishers is that once someone has invested several hundred dollars in electronic "guitars," drum kits, keyboards, microphones and other peripherals, they certainly don't want to buy any more of them, and they have no need to. And yet the publishers continued to need to subsidize the manufacturing of these complex and relatively expensive physical controllers in the hope of drawing in new players.