Posted on: Wednesday, November 10, 2004
'Halo 2' takes aim at PlayStation 2
• Legions of players find it's not easy saving Earth
• Master Chief fights the Covenant, and you're in control
By Dina Bass
Bloomberg News Service
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 industrywide 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, Washington-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 Evan Wilson, a game analyst at Pacific Crest Securities in Portland, Ore. He doesn't own shares of Microsoft or Sony.
Microsoft sold more than 1.5 million advance copies of "Halo 2," where a genetically enhanced soldier named Master Chief tries to save humankind from an alien force called the Covenant that's attacking the planet Earth. 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 Michael Pachter, a Wedbush Morgan Securities analyst in Los Angeles. Almost all of the 15.5 million people who own Xbox consoles will eventually buy "Halo 2," Rosoff said.
The game costs $49.99.
Microsoft compares the game's debut to a movie premiere and forecast "Halo 2" will generate more sales in its first 24 hours than the first-day box-office receipts of any movie in history. The company declined to provide an updated sales forecast this morning.
