Is Bungie Jumping Out Of Redmond?

It's a rumor from a blog with every third word misspelled, but this one seems to have legs. Microsoft appears to be preparing to either spin off or sell outright Bungie Studios, the developers of their fantastically successful Halo series of video games. Microsoft would retain the rights to any future versions of the Halo franchise, but Bungie would be an autonomous business.

...Microsoft's also pushing hard to make the Xbox business profitable so it's probably looking at all sorts of ways to shave costs. Running a studio is expensive, and Microsoft would still benefit from its creativity since Bungie would continue to develop Xbox games.

Microsoft did the same thing just after it released Halo 2, in late 2004. That's when it cut its sports game studio, laying off nearly 80 people, then sold a Utah studio that had made snowboarding games to Take-Two Interactive.

Here's what Xbox boss Robbie Bach said that year, back when he was expecting the division to be profitable in fiscal 2007:

"When we got to that point, we started looking around and started realizing, wait, we've got tons of third-party support. We shouldn't be the bulk game provider."

Maybe this was all part of a plan that would unfold as the Xbox hit critical mass. Microsoft's a platform company, not a content company.

It's actually kind of odd to have game development in-house at a hardware manufacturer. The business world likes strategic alliances of associated but different businesses, and mergers of companies with similar products or services that can lower their costs by merging. An in-house studio is an expensive luxury. It worked for a while, though; Halo put the Xbox on the map.

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