Microsoft and Bungie Studios to Evolve Relationship

Companies to forge new long-term relationship.

Microsoft Corp. announced a plan for Bungie Studios, the developers of the "Halo(R)"
franchise, to embark on a path to become an independent company. Microsoft will retain an equity interest in Bungie, at the same time continuing its long-standing publishing agreement between Microsoft Game Studios and Bungie for the Microsoft-owned "Halo" intellectual property, as well as other future properties developed by Bungie.

The critically acclaimed Xbox 360(R)-exclusive "Halo 3" achieved $300 million in global sales in its first week. Released on Tuesday, Sept. 25, "Halo 3" is the fastest-selling video game ever and already one of the most successful entertainment properties in history.

"Our collaboration with Bungie has resulted in 'Halo' becoming an enduring mainstream hit," said Shane Kim, corporate vice president of Microsoft Game Studios. "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."

"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 Harold Ryan, studio head for Bungie. "We will continue to develop with our primary focus on Microsoft(R) 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." Bungie Studios will remain in its current location in Kirkland, Wash.

Global Entertainment Phenomenon 'Halo 3' Records More Than $300 Million in First-Week Sales Worldwide

Xbox 360 console sales more than doubled; nearly 3 million gamers play online via Xbox LIVE.

Interactive entertainment will never be the same, with the launch of one title that has changed the way the world thinks about video games. "Halo(R) 3" has captured the attention of consumers worldwide and has made history as one of the biggest entertainment launches of all time.

Microsoft Corp. today announced that "Halo 3" has officially become a global phenomenon, garnering more than $300 million in sales in the first week alone. The critically acclaimed Xbox 360(R) exclusive, which was released worldwide on Tuesday, Sept. 25, is the fastest-selling video game ever and already one of the most successful entertainment properties in history.

Initial reports from retailers worldwide show console sales have more than doubled compared with the weekly average before the launch of "Halo 3." With games such as "Halo 3," "Madden 08" (EA Sports), "Mass Effect" (Microsoft Game Studios) and "Rock Band" (Harmonix), Xbox 360 has the greatest lineup in the history of video games and is the only console where consumers can play all the year's biggest blockbusters.

"'Halo' is truly a cultural phenomenon, and the launch of 'Halo 3' is an important milestone for Xbox 360 and for video games as entertainment and as an art form," said Bill Gates, chairman of Microsoft. "'Halo 3' embodies our vision for the future of entertainment, where some of the world's greatest creative minds will deliver a new generation of interactive storytelling."