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Will Halo Sales Again Rival Box Office Figures?

By Jim Goldman, CNBC

When Halo hit the market in 2001, it changed the video game industry. It was violent, sure, but the story was so complex, with graphics so rich, that it sucked players into a virtual world for hours at a time.

"It is all things to everyone," said Frank O'Connor, lead writer for Halo creator Bungie in an exclusive interview. "From a very, very high view, it's one guy saving the universe from utter destruction. Then you have little sub stories within. Characters and events that are going on all the time that people follow independently."

Halo has become a multi-billion-dollar phenomenon, from the game title itself to massive merchandising, and 15 million fans can't get enough. From basement Halo parties in New York to all-female Halo clubs in Texas, fans are establishing friendships — very deep and meaningful relationships — online.

Fan allegiance to the game comes from the intricate attention to detail in the game itself; both from production and the storyline.  The level of production in the game rivals most Hollywood blockbusters. But unlike the movies, where the camera simply captures all the action, Bungie designers and engineers have to create everything — every frame — from scratch, beginning with the voices of the characters. Stars including Terrence Stamp, Ron Perlman, Keith David, Robert Davi, Adam Baldwin, and Jen Taylor as "Cortana" — all returning for a tour in the sound booth.  Massive computing power models every character, turning those like "Master Chief" into superstars.

"His story is your story," said Bungie's O'Connor. "As a player, you are seeing things from his perspective, so you are able to inject a little of your own personality into that suit of armor."

Every scene must have dozens of options, covering every variable that might come up while players play.

"You are not playing a game, you are almost like a character in a movie," said Harold Ryan, Bungie studio manager. "It's definitely like being in a movie. You are making your own entertainment experience."

But Halo's similarity to movies doesn't end there. Sales of Halo 3 will look more like box office results than most video games, rivaling movies like blockbusters "Spiderman III," "Shrek III," and "Pirates of the Caribbean." The last version of Halo did $125 million in the first 24 hours. Halo 3 should dramatically exceed that.

"We will do more than any of those movies do in one day," says Robbie Bach, president for Microsoft's Entertainment Device Division.

Halo 3 is the last chapter in the trilogy — what some call the Star Wars for the "I-Gen" or Interactive Generation.

One of the 'cultural events of the year'

"It is among one of the entertainment cultural events of the year," Bach says of the game's Sept. 25 release.

It is the title gamers have been waiting three years for and the game that could jumpstart Microsoft's X-Box 360 gaming console, as the company fights for dominance against Sony's PlayStation and Nintendo's Wii. Nearly 2.5 million X-Box users still haven't traded up to the X-Box 360, according to Microsoft. The company hopes Halo 3 will get them to do so.

"Halo 3 is going to drive a ton of X-Box 360 sales as well as new x-Box Live memberships," says Shane Kim, vice president of Microsoft Game Studios.

The stakes are high for Microsoft, and the company says this is the critical event to juice X-Box 360 sales.

"It is content that drives the entire success or failure of the platform program over all," Kim says. "That is why we believe we have a significant competitive edge over Sony with a title like Halo 3 and other exclusive content."

Halo 3's secret weapon — linking to Microsoft's X-Box Live platform and its six million subscribers — allows dozens, even thousands of players to link up on the Internet and take each other on with Microsoft's gaming and computing future riding on every Halo click.

The chart below shows stock prices of some major gaming companies after before and after release dates of top-selling games. This is a small sample and many other variable could be in play, but for the 10 cases below, there seems to be a big shift from positive run up in the months leading up to release date to significant decline in the months that follow.

In fact, 70 percent of the time stocks have risen when looking at data from three months or one month prior to launch date compared to the actual launch date. One month after launch date, stocks are up 50 percent of the time. Three months after launch date, stocks are down 80 percent of the time.



Company name  

3 month lead-in

1 month lead-in

1 month post launch

3 month post launch

Halo 2







Grand Theft Auto: Vice City







Grand Theft Auto: Liberty City Stories







Gran Turismo 3







Madden 2007







Madden 2006







Madden 2005







Cartoon Network / Gameboy







Dungeons & Dragons







Guitar Hero







Average change





Percent positive





Percent negative