The Game Plan 12.14.07: No Big Deal, Part 1

Posted by James McGee on 12.14.2007

Bungie's split from Microsoft really isn't anything to get excited about. Trust me.

With the year winding down, I thought I'd spend my last couple of 2007 columns looking at two of the biggest news stories to hit the industry during the last year. The first is the split that occurred between Bungie and Microsoft—developer and publisher (respectively) of the Halo game franchise (perhaps you've heard of it). The other is EA Games acquiring Bioware/Pandemic, creators of Star Wars: Knights of the Old Republic, Mass Effect, Destroy All Humans, Mercenaries, and many other franchises. These events are interesting because they both occurred within mere days of one another, and they represent two polar ends of the spectrum in the business of gaming. In the case of the Bungie/Microsoft split, you have the smaller studio breaking away from the corporate tyranny of its parent company to forge a new path all its own. On the other side of things, EA's buyout is akin to the evil empire striking yet another, critical blow against "the little guy" on its way to total domination. The former can be seen as a great victory for independent developers, and the latter as a crushing defeat. However, I'd argue that neither situation is going to end up being as big a deal as some people make them out to be. Both essentially come down to business arrangements. There are pros and cons associated with each, but at the end of the day, not very much is going to change in either situation, at least as far as gamers are concerned. This week, I'll go into why I don't think Bungie's departure is going to cripple the gaming arm of Microsoft's empire, and why Bungie itself isn't going to completely abandon their former masters. I'm James McGee, and here's The Game Plan.

Gamers are a fanatical, excitable bunch, and I think the passion of the posters has more to do with the hype surrounding the Bungie/Microsoft split than the details of the agreement itself. Many gamers fancy themselves champions of the underdog, independent developers trying to make a living in the crowded, mega-conglomerate-dominated world of modern video games. People love to bemoan the disappearance of original ideas and independent studios (though very few seem to buy their games, but that's another story). So, Bungie leaving Microsoft and returning to their days as an independent publisher was cause for celebration for many. The reaction was something akin to the destruction of the Death Star (if there were giant statues of Bill Gates anywhere, I'm sure they would have been toppled).


With Bungie gone, are Master Chief's days of filling Scrooge McGates' money-vault over?

But this wasn't a rebellion. I'm sure that Microsoft wasn't happy to see such a profitable piece of their pie leave, but the most surprising (and telling) bit of this story is the fact Bungie was able to leave at all. This wasn't a case like Silicon Knights having an exclusivity agreement with Nintendo, then ending that agreement. Microsoft owned Bungie, free and clear. They didn't have to let the studio leave. But Bungie was obviously, on some creative and financial level, unhappy with their situation, and when they wanted to go off on their own, Microsoft obliged. It seems that Microsoft quite rightly figured that unhappy developers make for crappy games. Sure, just slapping the names "Halo" and "Bungie" on something is going to guarantee it sells, but if the game behind the name is lousy, success can't last forever. Happy employees make for better quality products, so Microsoft chose to keep Bungie happy, even if it meant letting them go (it's almost like a country song).

Bungie won't be the only party benefiting from the split, as Uncle Bill's generosity is bound to pay off in the long run. You also have to remember that Microsoft still retains a minority financial stake in Bungie. That means they still have a say, no matter how small, in the studio's activities. Does that mean that independent Bungie will still develop games exclusively for Microsoft consoles? Not necessarily, but I'd be very surprised to see them completely abandon the company that is responsible for their name becoming a household word, and at least partially to thank for the ability to go solo in the first place. "We've only made one game for the 360 [Halo 3] and that game happened to turn out very, very well," said Brian Jarrard, Bungie's franchise and community director. "The platform's been really good to us. Microsoft has been really good to us…It has been a partnership, and it will continue to be a partnership." Now, maybe that's all fluff and hot air to stay in Microsoft's good graces, but then again, the numbers speak for themselves: $300 million in sales for Halo 3 translates into a lot of money for both Microsoft and Bungie. Why would the developer want to thumb its nose at a publisher that helped it create the most popular and recognizable video game in the past five or ten years, especially after that publisher was big enough to let them strike out on their own after raking in such a huge profit?


With Ensemble Studios handling Halo Wars, has Bungie seen the last of the franchise it created?

Even if Bungie is no longer under the Microsoft banner, their most famous creation is. Microsoft owns the rights to all things Halo. It's one of the disadvantages in creating original intellectual property when you're owned by someone else. I'm sure the desire to create and own new IP had something to do with Bungie leaving, but how likely is it that they will want to completely abandon something that they have poured so much time, effort, and love into, especially considering that their vision for Halo began even before Microsoft acquired them? Halo Wars(a real-time strategy spin-off) is being developed by Ensemble Studios. Then there's the mysterious Peter Jackson Halo project, but who knows what (if any) involvement Bungie will ultimately have with that one. So is Bungie done with the franchise it created? Not likely, but if they want to go back to the world they created, they'll have to do so with Microsoft's help, so the two entities are far from done with each other.

As with most business endeavors, this deal really comes down to nothing more or less than money. Bungie joined Microsoft in the first place so that details (and costs) like publishing and marketing wouldn't get in the way of their development process. Microsoft very rightly assumed that owning a studio like Bungie—which is capable of generating quality content—would be very financially beneficial to them. Both parties gained something from the relationship (it's called "mutualistic symbiosis" in biology terms…hey, my wife's a college professor, you pick this stuff up) Don't ever fool yourself into thinking that Uncle Bill was the only benefactor. Now, Bungie is leaving because of money. Yeah, they want total creative freedom, but with that comes a bigger stake of the profits. Microsoft will, no doubt, still be getting a Christmas card from Jarrard and the gang, along with an exclusive or two. That means money for them. At the end of the day, not that much is going to change. The Xbox Empire will not crumble, and Bungie will not be doing any celebratory dancing with the Ewoks. Despite a few changes, things will just be business as usual.

Next week, I'll be looking at the other side of the coin, as I dissect the significance of Bioware/Pandemic being gobbled up by the largest third-party publisher around today. Does EA's acquisition spell certain doom for this fan-favorite developer? Tune in next week to get my take.