Activision Publishing has acquired UK studio FreeStyleGames.
The company is currently working on localised content for Guitar Hero, as well as a new intellectual property in the music genre.
"Activision Publishing is the undisputed leader in the music-based games and we see tremendous opportunity for continued growth, particularly in Europe," said Mike Griffith, president of Activision Publishing.
"An important part of our European growth strategy is to work with local developers and provide music content that resonates with the market.
"FreeStyleGames has an award-winning team with a history of developing innovative and creative music-based games and they are uniquely positioned to help us expand our leadership in the genre."
The studio has developed B-Boy for the PSP and PlayStation 2, and last year signed a deal with Red Bull Energy Drink to create videogame content for new home consoles.
"This is an exciting time for our company and great recognition of our success to date that Activision Publishing would look to welcome us to their studio roster," added Jamie Jackson of FreeStyleGames.
"Our goal has always been to deliver the most compelling entertainment experiences, and with the infrastructure, support and financial resources of Activision Publishing, we will be able to set our goals even higher than they are today."