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.