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April 29, 2010 at 9:41 AM

Kirkland’s Bungie signs huge post-Halo deal with Activision

Kirkland game studio Bungie, the creator of the hit “Halo” franchise for Microsoft, today announced a mondo publishing deal that will make Activision Blizzard the exclusive publisher of its next franchise for 10 years.

Bungie spent two years developing an entirely new game that will be released sometime after its “Halo” finale, “Halo: Reach” is released by Microsoft this fall.

A value wasn’t placed on the deal, but the entertainment franchise at stake is likely to be worth more than $1 billion and consume millions of hours of people’s time. Activision stock rose 3 percent, to close at $11.26 today.

Bungie’s likely to release at least three titles in the new franchise, the first of which could go on sale in 2012, according to a research note by analyst Shawn Milne at Janney Montgomery Scott.

Microsoft — and Sony — were among the companies that made bids for Bungie’s next title but the studio opted for a partner that would publish to all platforms, said Harold Ryan, Bungie president.

“We had agreed with Microsoft awhile ago to let them have first look at our game, so we did that,” Ryan said. “But we retained the right to negotiate for the best deal for the studio.”

Microsoft’s games group issued a statement noting that it continues to have a relationship with Bungie as a developer for the Xbox 360.

“We’re not at liberty to discuss details of Bungie’s publishing agreements,” the company said. “We respect Bungie’s decision as an independent studio to develop games for multiple platforms.”

Santa Monica, Calif.-based Activision is the top publisher of Xbox and PlayStation games in the U.S. and one of the top publishers worldwide. Its portfolio includes the biggest rival to “Halo,” the “Call of Duty” franchise, but it’s in a legal fight with studio Infinity Ward over “Call of Duty: Modern Warfare 2” bonus payments.

Bungie was started in Chicago in 1991 and moved to Kirkland after Microsoft bought the studio in 2000. They split in 2007, but Microsoft continued to publish the “Halo” franchise.

Now the 180-person studio has financial security and the backing of a top game company for the next decade. It also means the former Microsoft studio’s future games will be available on platforms besides the Xbox.

Activision’s getting “exclusive, worldwide rights to publish and distribute all future Bungie games based on the new intellectual property on multiple platforms and device. Bungie remains an independent company and will continue to own their intellectual property,” the release said.

Additional financial details weren’t disclosed.

The announcement noted that Bungie’s “Halo” games have generated about $1.5 billion in sales, according to NPD, and been played online more than 2 billion hours.

Activision Chief Operating Officer Thomas Tippl said the deal with “one of the world’s best developers” strengthens Activision’s growth plans. It also solidifies the company’s position as the leading publisher of interactive games played online.

Tippl noted that Activision’s portfolio includes leading online games such as “World of Warcraft,” “Call of Duty” and now the work of the “Halo” creators.

“Now we can bring all that expertise together and it makes a pretty compelling case we can achieve, as Harold likes to phrase it, world domination,” he said.

Tippl said Bungie isn’t filling a slot created by Activision’s fallout with Infinity Ward.

“It’s completely unrelated,” he said. “We started the discussion with Bungie nine months ago. The timing is purely coincidental. In fact, we had already signed a term sheet with Bungie in March and we just completed our long form today.”

Even though it didn’t get the publishing contract, Sony will now get Bungie content onto the PlayStation. In case this wasn’t clear, the company’s computer entertainment group released a gleeful statement of congratulations:

“The partnership between Bungie and Activision is a big win for gamers worldwide. Combining Bungie’s creativity with the incredible power of PlayStation 3 will add serious muscle to action gaming. We look forward to extending Bungie’s ‘next big action game universe’ with PS3 users.”

Here’s the video version of the release:

Comments | Topics: activision blizzard, bungie, Bungie

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