They do produce quality gear at an affordable price -- the problem is that people haven't updated their notion of affordable in a day and age where you pay $2-$4 for a cup of coffee, where a bare-bones car costs $10k-$13k (or almost $17k for the cheapest American made Chevrolet). Adjusted for inflation, Fender guitars are a great deal.

With regards to playing with toys, I really don't see how this is any more "playing with toys" than the G-DEC series of amps. Both are using technology to address the needs of a certain type of player. This product probably isn't aimed at you, just like a vintage reissue tube amp or AVRI strat isn't aimed at the people that would buy a G-DEC and the Rock Band controller squire.

Personally, I'd rather see Fender not try to be "all things to all people", but that ship sailed long ago. Given that they're focused on selling a "cradle to grave" product line (in terms of player development), they're making the right decisions for that strategic orientation.

Frankly, I'm surprised they were the first to try to figure out how to turn the rockband/guitar hero fans into potential new customers through an innovative gateway product.

I'd just like to add my two penneth here as I play rock band quite a bit, bot not guitar yet , also I'm not really a kid anymore (sob).

I couldn't really get into the guitar hero side of things, my sister loved the game, but it wasn't until Rock Band came out with the drum kit that I took an interest.
I did manage to pick up the drums quite quickly (for the game that is)

As for the original set up for the guitar, I wasn't too bothered, but the drums were closer, having to hit four drum pads and using a bass pedal.
(It also got my daughter aged 9 now into rock bands she had never really heard of such as Rolling Stones, Nirvana, Foo Fighters, 30 Seconds to Mars, Muse - the list goes on).
It got to a point where I was bleeding over my drumsticks trying to get through Everlong on expert and even though I could do it consistently, I wanted to improve - so I started taking lessons , bought a "proper" Yamaha drum kit and am still doing so.

With the new Rock Band 3 I can plug my full drum kit into the game, enable the hi hat pedal and belt away to some of the tracks.

The thing is, I would never have even attempted to take up the drums if it hadn't been for this game. I have heard that it takes away business from music tutors, but I would think the finger could be pointed more at tutorials on youtube, plus people short of cash right now, and general lack of interest in playing music (blame Xfactor for that one). Also someone who plays Call of Duty on an xbox for hours on end is less likely to pick up a guitar that someone who plays rock band anyway.


Anyway - to the guitar - I was thinking of buying the fender mustang midi guitar until I saw the adverts for this new Squier. So I will be ordering one of these as soon as I can, so will my sister (in fact I think I will be getting two) I don't expect to pick it up overnight, (it certainly hasn't been that way with the drums)
If it can do the same for me on the guitar as the game did for drums then brilliant - and I would expect after getting the basics I may be off to a tutor for lessons on technique.
(And also perhaps make use of my late dads Strat thats lurking in the wardrobe).

As for kids playing the game, yes there are quite a few, but quite alot of adults play too - Infact alot of the people I know who play, are also musicians and play the game now and again. When I asked one friend why (he plays lead guitar in a band) he said "just helps me with timing and is a bit of a laugh."