What Halo 3 has done to the industry

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      When Mike Zak graduated from the University of Victoria in 1999, he wasn't sure what he was going to do with the rest of his life. Little did he know that eight years later he'd be talking to media around the world about the biggest video game of the year.

      Zak, who left UVic with a degree in visual arts, enrolled at the Maharishi University of Management in Fairfield, Iowa. He was there to experience the school–founded by Beatles spiritual guru Maharishi Mahesh Yogi–but ended up with a full scholarship to study video-game design. He learned how to use computer graphics programs and game engines, and interned at a video-game startup company. But by the time he graduated, with a master's in digital media, the startup had folded.

      Zak felt that he had been isolated from the outside world while at the college, and knew he should get some experience at a real video-game studio. "I thought I should see what making a real game was like," he told the Straight on the phone from his home outside Seattle. A friend from the program had moved to Champaign, Illinois, to work at video-game developer Volition, and encouraged Zak to apply. "I was surprised to find out that I was qualified," Zak said.

      Two years later, and with a game–Red Faction II–under his belt, Zak had tired of the Midwest and was looking for a way to get back to the West Coast. Halo: Combat Evolved had just been released, and when Zak was coming up with his wish list of companies to work for, Bungie Studios, located in Kirkland, Washington, was at the top of it. A friend was already working there, and, he said, "The culture of Bungie grabbed me right away."

      He was hired in May 2004, and joined the Halo 2 team at the halfway point as an environmental artist. When it was time to start working on Halo 3, Zak had moved up the ranks to become a team lead for the environmental-art department. He's the resident hippie at Bungie now, and has discovered a love of creating worlds. "It's definitely been a challenge to flesh out so many art styles in the game," he told the Straight in an interview in Vancouver the week before Halo 3 launched, "but we're trying to take the player on a galactic journey."

      On September 25, Halo 3 was released in North America, with around 10,000 electronics retailers staging midnight sales events. More than 1.7 million copies of the video game had been preordered by expectant gamers. Twenty-four hours later, Halo 3 had generated US$170 million in the United States alone. To put this in perspective, the last book in the Harry Potter series, Harry Potter and the Deathly Hallows, sold 11 million copies in the U.S. and the U.K. in 24 hours, and the international gross from Spider-Man 3's opening weekend was US$382 million.

      In those first 24 hours after Halo 3's release, gamers around the world logged more than 3.6 million hours of on-line gameplay, which means that all those who stood in line waiting to make their midnight purchase hurried home and pulled an all-nighter playing the game. Students, office workers, and service staff alike played hooky, took personal days, and called in sick so they could play Halo 3.

      Over the next two days, Halo 3 was released to the rest of the world. It immediately rocketed to the top of sales charts and was the first game exclusive to the Xbox 360 to enter the Japanese sales chart at No. 1. A week later, Microsoft reported worldwide revenue of US$300 million. Collectively, gamers had spent more than 40 million hours playing the game in those first seven days.

      Just as the first game in the series sparked sales of the first Xbox console, the final chapter in the saga of Master Chief is moving 360s out the door. In September, for the first time since the release of Nintendo's Wii, the Xbox 360 outsold competing consoles in the U.S. and Canada, according to research firm NPD Group.

      Together, the Halo franchise–Halo: Combat Evolved, Halo 2, and Halo 3–has sold more than 20 million copies worldwide. Microsoft representatives hail this as a pop-culture phenomenon, and given how fans of the game have become evangelists for it, they're probably right. Call it the Halo Effect.

      The first game, Halo: Combat Evolved, came out of nowhere. With little fanfare–but a great deal of marketing support from Microsoft (something that hasn't changed; the budget for Halo 3 was estimated to be $40 million)–the game from Bungie Studios was released as an exclusive title in 2001 when Microsoft's new Xbox gaming platform hit shelves.

      Microsoft's foray into the video-game industry was a departure for the behemoth. Up until then, the company that Bill Gates built was only interested in creating and selling software, not hardware. But under the leadership of corporate vice-president J Allard, who was once dubbed Baby Bill by Business 2.0 magazine, the Xbox was created to compete with Sony's PlayStation 2 and Nintendo's GameCube, and to provide Microsoft with another entry into the homes–and entertainment centres–of the world.

      Bungie, known back in the '90s as Bungie Software, had a reputation for creating the kind of adrenaline-fuelled first-person-shooter (FPS) games that were popular with hard-core gamers, an audience coveted by Microsoft. Bungie's game Marathon, created for the Macintosh in 1994 and ported to the PC in 1996, introduced a number of innovations to the FPS genre, such as advanced-physics modelling and an intricate story line, and the next two games in the Marathon trilogy had their own technical and gameplay advances, too. Bungie announced plans for its new game Halo–for Macintosh and PC–at Apple's annual Macworld Expo in 1999. In June 2000, the company was acquired by Microsoft. Bungie Software became Bungie Studios, and Halo became an Xbox exclusive.

      In North America, at least, the Xbox and its younger, more powerful sibling, the Xbox 360, have been marginally successful. While the Xbox took a back seat to Sony's PlayStation 2, the Xbox 360 has outsold the PlayStation 3 in North America and Europe (although both are being outsold by Nintendo's Wii). And the Halo franchise is largely responsible for the success of the Xbox; it may push Microsoft's gaming division into the black for the first time since it was established in March 2000.

      The success of the Halo franchise transcends video games. Alternate-reality games created to promote the titles have turned viral marketing into an art form, and church leaders in the U.S. are using the Halo video games to reach out to younger members of their congregations by staging Halo tournaments and allowing the game to be played on church premises. One youth director quoted by the New York Times said that recruiting using Halo was "the most effective thing we've done".

      When North American box-office receipts from the weekend of October 5 were the poorest they'd been since 1999, Advertising Age magazine reported that some Hollywood movie executives were blaming Halo 3–released 10 days earlier–for the poor numbers.

      Beyond the video game, stories set in the Halo universe have also appeared in books and comics, a strategy that is one part cross-media merchandising and one part cultural creation.

      The first novel based on the video game was Halo: The Fall of Reach, written by Eric Nylund and published by Del Rey soon after the first game was released. It acted as a prequel to the game, telling the origin story of the protagonist, Master Chief. While the second novel, William C. Dietz's The Flood, was essentially a novelization of the plot of Halo: Combat Evolved, subsequent books told stories in and around the plot lines of the games. Nylund's Halo: First Strike, for example, bridged the plot gap between the first two games.

      In 2006, Marvel Comics published the Halo graphic novel, a collection of writing and art about Master Chief and his battles. This fall, Marvel is also publishing a four-issue miniseries by the Eisner Award–winning team of writer Brian Michael Bendis and artist Alex Maleev. Halo: Uprising fills in the story between the events of Halo 2 and Halo 3.

      This is where the Halo franchise becomes more than the sum of its parts. The vast and comprehensive Halo universe means there are myriad stories to tell. A gamer can pick up the video games without even knowing the books or comics exist, and play through a fast-paced action story. Sci-fi lovers can read the books without ever handling a controller, and will appreciate the finer details of the characters and the history of the civilizations.

      But those who play the games and read the books and comics get a sense of the completeness of the Halo universe, and how intricate the plot puzzle really is.

      Bungie Studios and Microsoft initiated a film adaptation by hiring Alex Garland to write the screenplay and attaching Peter Jackson in October 2005 as an executive producer. Then they shopped the project to Hollywood, insisting on having strict control over the production, which was a nonstarter for many of the studios they approached. Universal Studios and 20th Century Fox signed on as cofinancers, but pulled out of the project in fall 2006. An escalating budget and Jackson's choice of director, Vancouver-based Neill Blomkamp, were rumoured to have contributed to the studios' decision. While the Halo film may be in limbo, Jackson remains committed to the Halo universe.

      In September 2006, Jackson started Wingnut Interactive in Wellington, New Zealand, and he has set his new game-development studio to work on an episodic series set in the Halo universe. "I'm a little bored with films," the director told the BBC during an interview about the studio's formation. "Technology is at a point where we can blend a lot of film storytelling with interactive entertainment."

      The main reason that the Halo games are able to straddle different cultural industries is that the characters and story are so complex and layered. Bungie's Mike Zak told the Straight that the team worked to develop a "thorough fiction" for the game, even if this isn't immediately apparent to the player.

      He explained that the story line of Halo 3 was created by a small group of writers, based on the work of a story committee that included representatives from every studio department; Zak participated in the weekly story meetings on behalf of the art department. "Each week, we would tackle a topic or question about the story and characters," he said. The objective was to ensure that Halo 3 tied up any loose ends, and to "make sure we were focusing on the heart and meaning of Halo".

      Zak admitted that Halo 3 would face some high expectations. "Halo 3 can't surprise you the way the first game did," Zak said, "but I think it's going to live up to the hype."

      And it has.

      Which is why the industry was so surprised when, two weeks after the game was released to rabid gamers, Bungie Studios announced it was splitting from Microsoft to become an independent studio once again.

      In a statement, Microsoft said that the relationship between the two companies was simply "evolving", but one thing's for sure: development studios don't often leave the publisher that owns them, nor do publishers typically cede a group of gamemakers that generates such enormous revenues. Frank O'Connor, writing lead at Bungie, said that when studios do leave publishers, "It's not typically a happy occasion," but all signs suggest that this separation is.

      On the phone from his office in Kirkland, Washington, O'Connor told the Straight, "Microsoft recognized something that we recognized, and that was that we could do just as well on our own. They are looking for the next big thing. If they can get that by having us operate independently, that's good for them."

      O'Connor said that discussions about Bungie leaving Microsoft started about a year ago. Although the transition was initiated by Bungie, "It was a mutual conversation." Both entities benefit from the amicable split, he insisted. The biggest benefit to Bungie, said O'Connor, is operational. "Being an indie again gives us more flexibility in terms of vendors and contractors," he explained. "The creative part was never a problem with Microsoft, but being on our own means we can move more agilely."

      Microsoft is maintaining an equity interest in the company, but from here, where Bungie goes is where it wants to go. Microsoft may own the Halo franchise, but Bungie will own any intellectual property it creates. "Each of Bungie's games has been bigger and better than the one before," said O'Connor. "We're hoping that trend continues."

      Links: Halo 3 official site
      Bungie Studios official site