Halo' Creator Bungie to Become Independent

Microsoft will retain an undisclosed equity interest in Bungie. The announcement, made Friday, follows a post on the 8BitJoystick blogfrom earlier this week that leaked the news.

Microsoft Corp. confirmed that it will spin off Bungie Studios, developer of the "Halo 3" video game that recently set records for opening day sales

Practically speaking, not much will change, said Frank O'Connor, writing lead at Bungie. While he said that the move is "fiscally prudent" for Bungie because it will get a better share of profits, the company will continue to work closely with Microsoft on developing games for the Xbox console.

He left open the answer to a burning question from fans of other gaming platforms: Will Bungie write games for non-Xbox consoles? "In theory, yes," he said. But for a while the relatively small staff of 120 will continue to work on Xbox 360 games, he said. Projects for the midterm are already lined up and they're all based on the Microsoft console, he said.

"Honestly, we're really happy working on the 360," he said. "It's our platform of choice."

Bungie was once an independent company. Not quite 10 years ago it was acquired by Take 2 Interactive Software Inc. Later, Microsoft took a share in Bungie and then bought it outright.

Microsoft owns the intellectual property for "Halo," a series that just released its third and final game. "Halo 3" brought in sales of US$170 million in the U.S. the first day it became available. Microsoft says that's the best video game and entertainment launch in history. "Halo 3" sales reached $300 million globally on the first weekend.

Microsoft `Halo' Creator Bungie to Become Independent

Microsoft Corp.'s Bungie Studios, creator of the best-selling ``Halo'' video games, will become an independent company to build on the success of the alien-shooting title.

Microsoft, the world's biggest software maker, will maintain a stake in the company, which also developed the ``Marathon'' trilogy and the first two ``Myth'' games. Bungie will stay focused on games for Microsoft's Xbox system, according to a statement today. Terms of the agreement weren't disclosed.

Bungie, acquired in 2000, sought more independence from Microsoft as its ``Halo'' games drew millions of players to the Xbox system. The game's latest installment brought in sales of $300 million in the week after its Sept. 25 debut, making it the fastest-selling video game ever.

``The success of the `Halo' franchise gave us the kind of leverage where we could keep hedging further away from Microsoft,'' Frank O'Connor, the lead writer at Bungie Studios, said in an interview from Kirkland, Washington. ``Microsoft realized the best thing for our creativity and for Microsoft's profitability was to let us spread our wings.''

Microsoft, based in Redmond, Washington, will continue to support Bungie's development of ``Halo'' games. The company is banking on future editions to help make its Xbox unit profitable and close a gap with Nintendo's best-selling Wii system.

Bungie, founded in 1991, has been in spinoff talks with Microsoft for about a year, O'Connor said.

`Best Interest'

``It was in our best interest to support Bungie's desire to return to its independent roots,'' Shane Kim, corporate vice president of Microsoft game studios, said in an interview. ``There's really no change except Bungie's employees work for Bungie instead of Microsoft, and that's important to them.''

Microsoft shares rose 23 cents to $29.94 at 3:08 p.m. New York time in Nasdaq Stock Market trading. The stock was little changed this year before today.

The success of ``Halo 3'' in its first week propelled sales of the Xbox 360 machine to double their weekly average, Microsoft said.

``It was a nit in the back of employees' minds that they just wanted to be independent,'' said Harold Ryan, Bungie's studio head. ``The idea of being independent was something they were all romantically attached to.''

Chasing the Wii

Microsoft has pledged to make the Xbox division profitable this fiscal year, which ends next June. The business has lost $7 billion since the game machine first went on sale in 2001. Microsoft cut the price of the console by $50 to $349.99 to compete with the Wii, which sells for $249.

Nintendo's Wii sold about 400,000 units in August, compared with 277,000 for the Xbox 360, according to Port Washington, New York-based NPD Group Inc. Since its debut in November 2006, the Wii has sold 4 million units in the U.S. The Xbox, which came out a full year earlier than the Nintendo system, has sold 6.3 million. .

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