Someone started a very vague rumor that Microsoft was going to spin off Bungie. There was a discussion around what is Bungie worth, so here is a rough approximation based on things we know about Bungie.
Bungie averages a 3 year development cycle on Halo 2 and Halo 3. Halo 2 sold 6 million copies between the Xbox and PC version, and Halo 3 should do about the same to 20% higher, so we will say 7 million copies. Taking the $50 per copy average for Halo 2 that is $300 million and the $64 average for Halo 3 that is $448 million.
Many companies are going for "Ten X" their gross average revenue. With Bungie that would be somewhere between $100 million and $150 million a year or a value between $1billion and $1.5billion. That sounds expensive until you look at deals which have recently made headlines such as EA’s "purchasing" of Peter Moore from Microsoft. Peter Moore took a $1.5 million dollar signing bonus, a $550k salary and there received a $21 million dollar stock award. Bungie has how many employees? And how much Intellectual Property?
Sure it would fun to see the Halo brand expanded to other consoles but truthfully who would but the money in to a title that Microsoft is willing to. Bungie is successful because they have a tight relationship with the hardware manufacturer, and that relationship results in Bungie being able to create games that draw on more of the Xbox’s computational power.
The e-mail that started this all….
"So heres my big secret. You should google Bungie + Microsoft + separation this week.
You know that big ol BILLION dollar franchise Bungie has created for Microsoft, to show their appreciate Microsoft is letting Bungie leave. Of course Microsoft gets to keep all rights to the Halo franchise, but as today Bungie no longer part of Microsoft. Ask anyone who works there to search the global address book, they’re no longer in there. Microsoft was supposed to release the press release today but if they wait till the 10/6 the impact wont effect the quarterly results. However today is the actual official date and the day the NDAs expire, however you still didn’t hear this from me."
And in the Confirming that the relationship is changing but Bungie is not being put to pasture….
Microsoft and Bungie Studios to Evolve Relationship
Companies to forge new long-term relationship.
REDMOND, Wash. — Oct. 5, 2007 — Microsoft Corp. today announced a plan for Bungie Studios, the developers of the “Halo®” 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®-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® 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.
About Bungie Studios
Bungie Studios was founded in 1991 with two goals: to develop games that combine brilliant technology, beautiful art, intelligent stories and deep gameplay, and then sell enough of those games to achieve its real goal of total world domination. Over the past 10 years it has produced games such as the “Marathon” trilogy and the first two “Myth” games, hailed as classics by critics and gamers around the world. Bungie’s “Halo” franchise is an international award-winning action title that has grown into a global entertainment phenomenon, selling more than 14.8 million units worldwide, logging nearly 1 billion hours of multiplayer action on Xbox LIVE®, and spawning action figures, books, a graphic novel, apparel and more. Bungie released “Halo 3” on Sept. 25, 2007 to universal critical acclaim, and first day US sales of over $170 million, making it the biggest opening day in entertainment history. More information on Bungie can be found at http://www.bungie.net.
About Microsoft Game Studios
Microsoft Game Studios is a leading worldwide publisher and developer of games for the Xbox and Xbox 360 video game systems, the Windows® operating system and online platforms. Comprising a network of top developers, Microsoft Game Studios is committed to creating innovative and diverse games for Windows (http://www.microsoft.com/games), including such franchises as “Age of Empires®,” “Flight Simulator” and “Zoo Tycoon®”; Xbox and Xbox 360 (http://www.xbox.com), including such games as “Gears of War” and franchises such as “Halo,” “Fable®,” “Project Gotham Racing®” and “Forza Motorsport®”; and MSN® Games (http://www.games.msn.com), the official games channel for the MSN network and home to such hits as “Bejeweled” and “Hexic®
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.