Bungie Going Independent; Microsoft to Retain Equity Interest, Publishing Rights (Breaking)

By Chris Remo and Chris Faylor, Oct 05, 2007 12:52pm PDT Partially confirming persistent rumors originating this week, Microsoft has announced that Bungie Studios, once the independent developer of the Marathon and Myth franchises and currently a wholly-owned Halo-developing first-party Microsoft subsidiary, will make moves towards corporate independence. The company was founded as a heavily Mac-oriented developer in 1991 and acquired by Microsoft in 2000.

Both parties are said to be "focused on the continued success of the 'Halo' franchise." Microsoft stated it will retain both a minority equity interest in the studio as well as its control of the Halo franchise and its publishing rights to further Bungie products. Unlike when the company was acquired and moved from its Chicago home to Kirkland, Washington, this shift will not result in another change of location.

Though Microsoft will continue publishing Bungie's titles, the studio will retain ownership of any new intellectual properties it creates. Both IP ownership and the ability to develop non-Halo titles were rumored to be major factors behind the split.

The situation is reminiscent of Sony Computer Entertainment's relationship with Ratchet & Clank developer Insomniac Games. Though the studio is independently owned, it only develops for Sony platforms and its titles represent some of the PlayStation 2 and PlayStation 3's flagship games, usually receiving massive marketing campaigns from publisher Sony.

Said Microsoft Game Studios VP Shane Kim, "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 Peter Jackson, on a new interactive series set in the 'Halo' universe. We look forward to great success with Bungie as our long-term relationship continues to evolve through 'Halo'-related titles and new IP created by Bungie."

One such example of a Halo-related project is Ensemble Studios' Halo Wars, an Xbox 360 exclusive real-time strategy game that takes place in the Halo universe. Set 20 years before the first Halo game, the Age of Empires developer is working closely with Bungie on title to ensure it fits within the established mythology and feel of the franchise.

Bungie has kept quiet about what its next full-scale project will be. Speaking to Shacknews, Bungie's Frank O'Connor recently stated indicated that the company's main upcoming focus is post-launch Halo 3 content and the still-hazy Peter Jackson project. He also added, "Beyond that people are asking what we're going to do. Will we go back and do Myth, will we go back to Marathon? The honest answer is we don't know yet, but we're prototyping. We have some choices, and we have some cool ideas."

"We'll continue to make Xbox 360 games, and we'll continue to make amazing games for MGS," reads a post by O'Connor on Bungie.net. "In that regard, nothing has changed. All that has changed is that now Bungie Studios is once again, the property of the folks of Bungie Studios."

"This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organizationally in our mission to create world-class games," said Bungie studio head Harold Ryan in today's announcement. "We will continue to develop with our primary focus on Microsoft platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios; and we look forward to continuing that affiliation through 'Halo' and beyond."

In the years following Microsoft's initial acquisition of Bungie, several staff members left the studio to start their own independent companies. Bungie founder and creator of Halo, Myth, and Marathon Alexander Seropian went on to form Wideload Games, which developed Stubbs the Zombie (PC, Xbox) and is working on Hail to the Chimp and an Xbox Live Arcade project. Giant Bite was created by former Bungie and Valve employees.

At the time, such departures were thought to be, at least in part, a result of ex-employees fleeing Microsoft's corporate rule and seeking the freedom Bungie had when it was self-owned. This theoretical scenario appeared to gain credence when Halo 2 online lead Max Hoberman left Bungie to create Certain Affinity, where he and his staff in Austin, Texas continued working on Halo in the form of the Halo 2 Blastacular Map Pack.

"Working with Microsoft was great for us, it allowed us to grow as a team and make the ambitious, blockbuster games we all wanted to work on," said Bungie founder and partner Jason Jones. "And they will continue to be a great partner. But Bungie is like a shark. We have to keep moving to survive. We have to continually test ourselves, or we might as well be dolphins. Or manatees."

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