Activision Blizzard, the gaming company formed by the merging of Activision with Vivendi Games, is planning to develop an online music platform to complement its popular Guitar Hero franchise.

The online music platform, thought to rival iTunes, is a "natural evolution" of the Guitar Hero franchise, according to Bobby Kotick, chief executive of the new merged company.

He added: "I don't think there have been a lot of credible alternatives to iTunes, but Guitar Hero certainly has that potential."

The Guitar Hero franchise has sold close to 20m units and generated $1bn in revenues.

The merger of Activision and Vivendi Games completed this week, and its thought the new company will benefit significantly from Vivendi's ownership of Universal Music and of payment and processing capability in "virtually every country", according to Jean-Bernard Levy, Vivendi's chief executive.

"These are all the things that enable you to be a successful competitor [to iTunes]," Mr Kotick added.

Nothing says that clearer than the fact that Activision Blizzard is understood to be competing with MTV Games for a deal to put the Beatles back catalogue into a guitar-based game, while iTunes has been denied access to the band's songs to date.

Activision also has $3.5bn to decide what to do with that was originally going to fund a tender offer, until Activision Blizzard's shares rose so much this became unlikely to happen.

The company has so far declined to comment on whether it would enter bidding for GTA's publisher Take Two, which EA is currently bidding for - rather unsuccessfully.

Whether it does or not, the company has laid out its plans for the future, which show its desire to concentrate on global expansion.

"We have a strong presence in Asia and when you combine the two companies there are going to be opportunities to grow, particularly in Europe," Mr Levy said.

As for the Take Two scenario, we'll just have to watch this space for now.