Microsoft Sets Halo Gaming Partner Bungie Free

Bungie Studios launched in 1991 and sold itself to Microsoft in 2000, soon after Bungie previewed its under-development first-person shooter Halo. After that acquisition, Halo was released exclusively for the Xbox and became the killer app for Microsoft's upstart gaming console. (Versions were later released for other platforms, including Windows and Mac PCs.)

Successive Halo sequels were equally successful, both critically and commercially. Halo 3, released last week, has blown through console gaming records: Microsoft said it rang up $300 million in sales during Halo 3's first week on the market and logged 2.7 million gamers playing the game on Xbox Live.

Microsoft's decision to set Bungie Studios free, loosing its grip on the multi-billion-dollar Halo franchise, follows reports of tension between the indie-minded gaming studio and the software industry's Goliath. The rumored split, now confirmed, was first reported several days ago on a Seattle Post-Intelligencer reader blog covering video gaming news.

As a tipster wrote to blog author Jacob Metcalf: "Apparently MS just wants Bungie to make Halo for the rest of their natural days, and Bungie doesn't like how MS is constantly trying to 'handle' everything they do; the way they market their games, the way they interact with their fans (basically the fact that they do appreciate their fans), and how stingie they are with the profits (comparable to the rest of the industry)."

Microsoft, which owns the intellectual property around Halo's characters and game universe, said it will retain an equity interest in Bungie, though it did not specify how large its ownership stake will be. Microsoft will also continue to serve as Bungie's publisher for any future Halo installments and, potentially, for other games developed by Bungie as well.

"While we are supporting Bungie's desire to return to its independent roots, we will continue to invest in our 'Halo' entertainment property with Bungie and other partners, such as [Lord of the Rings director] Peter Jackson, on a new interactive series set in the 'Halo' universe," Shane Kim, corporate vice president of Microsoft Game Studios, said in a written statement.

Bungie will remain in its current headquarters in Kirkland, Wash., and will continue focusing primarily on developing for Microsoft platforms, Bungie studio head Harold Ryan said.