Microsoft said yesterday that it was giving up its controlling ownership of Bungie Software, the video game subsidiary that developed the hugely popular Halo franchise, including its latest iteration, Halo 3.
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Bungie, based in Kirkland, Wash., said it planned to return to its roots as an independent game studio, a move that eventually will cost Microsoft exclusive ties to one of the most successful and sought-after teams of game developers.
Harold Ryan, president and studio head of Bungie, said that he had been working for months on a plan to separate the studio from Microsoft, based in nearby Redmond, Wash. Mr. Ryan said that the companies had a good working relationship, but that developers at Bungie yearned to work for themselves, not a corporate owner.
“It’s an emotionally creative point of view,” he said of the decision to take the studio independent. “That’s the state we wanted to be in.”
Neither Mr. Ryan, nor Shane Kim, the head of Microsoft’s game studios, would discuss the financial terms. Microsoft originally acquired Bungie in 2000 for an undisclosed amount.
Bungie’s Halo games have been of singular significance to Microsoft in the development of its video game machine business.
Halo has been available exclusively on Microsoft’s Xbox video game consoles. That has meant the game’s popularity has helped drive consumers to the Xbox consoles rather than to competing systems made by Nintendo and Sony.
Microsoft said that since Halo 3 hit the market last week, it had rung up more than $300 million in sales. It has been selling at a faster pace than Halo and Halo 2, which combined sold nearly 15 million copies, Microsoft has said.
Mr. Kim said the separation furthered Microsoft’s aim of getting blockbuster hits for its consoles. “It was in our best interest to support Bungie’s desire to return to its independent roots,” he said.
At least initially, important aspects of the relationship between Microsoft and Bungie will remain intact.
Mr. Ryan said that Bungie planned to continue to develop games exclusively for the Xbox platform. He said that at some point, Bungie would have the right to develop games for other platforms, but he declined to say when.
Bungie has 113 employees. Evan Wilson, a video game industry analyst with Pacific Crest Securities, said that leading employees of Bungie had bought out majority ownership from Microsoft. “Bungie and Microsoft clearly had different creative directions,” Mr. Wilson said.
He added, “Bungie lost some key employees over the years, which while not uncommon for studios, may be an indication of that.”
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