IGN reports that the May issue of Conde Nast Portfolio magazine sees Activision CEO Bobby Kotick revealing a future direction that would put his company’s Guitar Hero franchise on equal footing to last year’s newcomer, Rock Band. Upgrades include additional instruments (including vocals and, we hear separately, drums), as well as “local content” from “local bands.”

This corresponds with information Joystiq has received from a source close to the company, who tells us that multiple instruments including a microphone and drumkit will be a part of the next Guitar Hero game, likely to be called Guitar Hero IV despite its focus on multiple instruments (other potential names: Band Hero and Rockstar Hero). Also, our source reports that Activision insiders are proud enough of their drum peripheral to say that it will be “superior” to Rock Band’s (we know, shocking).

Perhaps just as importantly, Activision’s weakness in downloadable content could be resolved as early as the release of Guitar Hero: Aerosmith this June, when content is expected to be released regularly, perhaps “even weekly.” Also contributing to the company’s positive outlook on DLC is the pending merger with Vivendi, potentially giving it unparalleled access to that company’s Universal Music Group, the largest family of record labels in the music industry.

We’ve asked Activision to comment on this story. If anyone close to the story has any additional information to share, you know where to find us.

Portfolio: Guitar Hero is hugewith more than $1 billion in sales since it was introduced in 2005. Essentially, it lets people play along on a fake guitar to real songs. Given that the Universal Music Group is part of Vivendi, will any special emphasis be given to its songs and artists?

Kotick: One of the big benefits will be access to the Universal library. Guitar Hero takes an artist to a whole different place in the popular culture right now. Downloads on iTunes take off. The artists relevance and importance to 17-year olds change in a way that you could never get in any other medium. Forty percent of its users are women. The age appeal is something we’ve never seen before7-year olds who have no idea who Aerosmith is are playing the band’s music on Guitar Hero. So are 45-year olds who spent a good portion of their lives following the band around.

Portfolio: Where do you take the idea next?

Kotick: Its not just about guitars. Well include a lot of other instruments, vocals. It will help us expand internationally. Its the first game weve had in which we can use local content and local bands.

Portfolio: What else is in the works with other games?

Kotick: Lets take Wii. There are opportunities to add to the physical experience, whether it’s guitars or the Star Wars gamein which you have a lightsaberor fishing. Having that physical connection with what you see on the screen is bringing in audiences that never would have tried games. But were in the very, very earliest stage of physical interface.

Portfolio: OK, whats coming that we havent seen yet?

Kotick: Games have not been a good storytelling medium. Its because the characters on the screen dont have good facial animation. Mouth movement is unrealistic, so its hard to deliver dialogue. Facial animation and mouth movement will become part of games.