Bungie jumps, but the Halo doesn’t slip

I learnt recently that Bungie, the people behind Halo 3, has done something quite unusual. For the last decade or two, most start-ups have had acquisition by Microsoft (or, more recently, Google) as their goal. Bungie, having achieved their goal, have apparently agreed terms with Microsoft to go back to being an independent company.

This by itself would have intrigued me, maybe just a bit. Coming on the back of Halo 3’s incredible success, it would normally have intrigued me even more. But what got me is the following quote from the BBC article:

On the Bungie website, Frank O’Connor, lead writer on Halo, explained the move to the community of fans: “Bungie has long been built on creativity, originality and the freedom to pursue ideas.

“Microsoft agreed, and rather than stifle our imagination, they decided it was in both our best interests to unleash it.”

Put this in the context of the following quote from Microsoft:

Shane Kim, corporate vice president of Microsoft Game Studios, said the company was “supporting Bungie’s desire to return to its independent roots”.

He said Microsoft would continue to invest in 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,” he added.

So let me get this right. Microsoft are letting Bungie go back to being independent, recognising that they might “stifle” Bungie’s “imagination”. Wow.

Sometime in 2000, when I chaired the technology incubator at what was then Dresdner Kleinwort Benson, I remember getting into conversation with Professor N “Venkat” Venkatraman about a related subject: in those days, so many startups seemed to have “bought by Microsoft” as their exit strategy. Venkat remarked that the trend could not continue, for two reasons. Firstly, Microsoft were running out of a critical currency …. their equity was no longer attractive to new hires. Secondly, partly as a consequence of the equity currency problem, but more as a result of becoming mainstream, they were unlikely to remain the only game in town for startups who wished for a trade sale exit. In both cases, we came to the conclusion that at some point Microsoft would no longer buy companies outright, but instead take a minority stake. That way, the potential problems to do with attracting talent or retaining speed and agility could be solved.

And now, seven years later, we have Bungie jumping. With Microsoft’s blessing, and while Microsoft retain a stake. Intriguing. Very.

Maybe the Blue Monster is working after all. Something’s changed.

7 thoughts on “Bungie jumps, but the Halo doesn’t slip”

  1. The games industry is an interesting one, where the publishers hold a lot of power of the development studios. It’s interesting to hear that Microsoft retain the Halo IP. I wonder what the terms of the seperation are, whether Microsoft has guarenteed publishing rights or otherwise. It’s a brave move, Bungie have obviously got the talent to thrive, let’s hope they do so.

  2. Yes, a real example of a killer app where you buy the hardware just to play the game. Also, it shows the importance of looking after the talent. From Marathon to Myth to Halo Jason Jones (and others) have been key creative leads – if they want to walk either to do a completely different game genre or to be able to support other platforms then it would be difficult to “insist” on them doing a Halo 4. This way Microsoft may have first dibs on any new game and remain on good terms with and close to the talent. (That’s assuming that they haven’t completely fallen out already with creative differences or bueaucracy.)

  3. It’s the shift of understanding that is so inspiring and wonderful, isn’t it- one almost feels that if Microsoft can respect the creativity of small groups, the whole world might become an enormously better and more peaceful place. Wow.

  4. Alice, I agree with you. It is easy for us to get cynical about Microsoft’s motives. It is much harder for us to believe that they are changing.

    I’d rather believe the hard thing. And if its true, then that makes many other hard things possible.

  5. I had to post, having spent the last two days compulsively playing Halo3 with my girlfriend… It’s the only Xbox 360 game which has engaged her in 18 months!

    It’s certainly intriguing to see Bungie cutting the cord with Microsoft, but I think it’s mainly down to the fact they aren’t producing anything outside of Halo, and the cycle of that particular product will probably be on the wane, unless someone like Bungie can go off, experiment, and come back with a new direction, outside of the constant need for updates.

    It’s a sign Microsoft are still willing to experiment in a relatively new space for them, in he same way as hiring industry veteran Jeff Minter to create a game, or the Xbox Live Arcade concept in general.

    If Microsoft is retaining the Halo IP, it probably recognises it can’t rely on the same yearly updates the sports market (Mainly Electronic Arts) thrives on, and needs to look at other ways to build the brand.

    After all, didn’t Microsoft’s J Allard suggest about 1 or 2 years ago that he envisioned a world in which Halo could be played on mobile/console/PC in different ways, but all contributing to the same game?

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