Microsoft’s ‘Halo 2’ Poised to Brawl ‘Grand Theft Auto’

Microsoft Corp. started selling “Halo 2,” the sequel to the best-selling title for its Xbox video-game machine, as more than 7,000 stores opened at midnight to cater to enthusiasts eager to buy the futuristic shooting program.The company hopes the fanfare will overshadow its biggest competition, “Grand Theft Auto: San Andreas,” a game for Sony Corp.’s PlayStation 2 that came out two weeks ago and is expected to be the top seller industry wide this holiday season.Microsoft, the world’s biggest software maker, has made little progress catching Sony in the $22.3 billion market for video-game hardware and software. Microsoft has spent $12 billion in four years in this market, and PlayStation2 outsells the money-losing Xbox 5-to-1. The original “Halo” is the only console game Microsoft has designed that’s sold more than 2 million copies.“The main thing, and frankly the only thing, that’s going to drive the Xbox business for Microsoft is ‘Halo 2’,” said Matt Rosoff, an analyst at Kirkland, Wash.-based Directions on Microsoft who has followed the company for four years. “PS2 has ‘Grand Theft Auto’ but they also have other games and the new smaller form factor, which I hear is reviving sales.”Half of video-game makers’ annual sales come in the holiday shopping season, and game designers are weighing whether to produce titles for the next models of Xbox and PlayStation, which analysts expect in 12 to 18 months. If “Halo 2” is popular, it may bolster Microsoft’s chances to win more games for Xbox.“Microsoft has finally figured out that the console wars are about having a blockbuster game, not about technology,” said a game analyst at Pacific Crest Securities in Portland, Ore., Evan Wilson. He doesn’t own shares of Microsoft or Sony.Microsoft sold more than 1.5 million advance copies of “Halo 2,” in which a genetically enhanced soldier named Master Chief tries to save humankind from an alien force called the Covenant. The program came from Bungie, a game studio Microsoft bought in 2000.The game probably will sell 10 million copies this quarter, twice as many as the total number the first version sold since its debut in November 2001, said a Wedbush Morgan Securities analyst in Los Angeles, Michael Pachter. Almost all of the 15.5 million people who own Xbox consoles will eventually buy “Halo 2,” Mr. Rosoff said.Publisher Random House’s second biggest print run for any kind of book this fall will be the “Official Game Guide for Halo 2.”The game costs $49.99. Microsoft will sell a limited edition two-DVD set with the game and features such as “making-of” footage and commentary from the developers for $54.99.Microsoft compares the game’s debut to a movie premiere and says “Halo 2” will generate more sales in its first 24 hours than the first-day box-office receipts of any movie in history.“What’s really great for the game makers who partner with us is when they see Microsoft delivering really compelling content that gets customers really excited about Xbox and Xbox Live, because that means there’s a lot of excited people that they can develop games for,” said the general manager of Microsoft Game Studios, Shane Kim.Microsoft is also counting on “Halo 2” to boost subscriptions to its online gaming service, Xbox Live, to 1.5 million from 1 million by June 30. “Halo 2” players will be able to battle each other over the Internet using the service.Microsoft shares have gained 7.7% this year, compared with less than 1% for Tokyo-based Sony. Microsoft gained 49 cents to $29.77 in Nasdaq Stock Market composite trading.Analysts’ sales projections show “Halo 2” in a tight race with “Grand Theft Auto: San Andreas,” the latest game in a series from New York-based Take-Two Interactive Software Inc. that have become the flagship PlayStation 2 titles. Mr. Pachter also expects “San Andreas” to sell 10 million copies this quarter.“San Andreas” came out October 26, and sales have been “significantly higher” than the previous version, Take-Two President Paul Eibeler said last month. In the game, players’ tasks include running a strip club, drive-by shootings and of course, stealing cars in a mythical West Coast setting modeled on South Central Los Angeles.“Grand Theft Auto III,” the first in the series built for the PlayStation 2, went on sale in October 2001 and was the best-selling PlayStation 2 game ever until the sequel. That game, “Vice City,” sold 13 million copies.Sales of the consoles themselves also have been in a close contest in recent months. Xbox outsold PlayStation 2 in America for the first time last quarter, partly because of a shortage of the new slimmed-down version of the PlayStation.Microsoft has said it will provide details on the next version of Xbox in May at the E3 trade show in Los Angeles, the same time Sony has scheduled a first look at its next PlayStation. Microsoft needs to convince designers that the success of “Halo” means it is worthwhile to create more games for Xbox, analysts said.“Going forward, Microsoft obviously needs to find another series beyond ‘Halo’ to have success with if they are going to make Xbox a profitable business,” said Alan Davis, an analyst at Seattle-based McAdams Wright Ragen, which owns Microsoft shares and manages $2 billion. “They’ve got a long ways to go if they want to displace Sony as no. 1.”

Microsoft’s ‘Halo 2’ Poised to Brawl ‘Grand Theft Auto’

Microsoft’s ‘Halo 2’ Poised to Brawl ‘Grand Theft Auto’

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