Dispute with Microsoft stops announcements

The biggest story at E3 is turning out to be the one that didn’t happen.

Bungie Studios, the development studio behind the mega-hit “Halo” franchise, was planning on Wednesday to debut its first game since separating from former parent company Microsoft last fall to go independent.

But it seems Microsoft, which still publishes Bungie’s games, didn’t like that idea. Dispute between the two companies led to the last-minute cancellation of the announcement.

According to insiders, conflict over the timing announcement, as well as some other ongoing disagreements, led to Microsoft’s surprising decision not to discuss any of its upcoming “Halo” games during a Monday press conference. Even 2009’s “Halo Wars,” which is being made by a new developer and is on display at Microsoft’s E3 booth, got nary a mention.

Sources said “Halo Wars” was set to be part of Microsoft’s presser and was cut at the last minute by the company’s top videogame exec Don Mattrick due to the dispute with Bungie.

In a statement on the company’s website posted Tuesday evening, Bungie topper Harold Ryan said his team had been building toward “a reveal of something exciting” but that “those plans were changed by our publisher.” Insiders confirmed that Microsoft’s final decision to cancel the announcement was made earlier Tuesday.

A source close to Microsoft said Bungie’s promise to make an E3 announcement was made prematurely without consultation.

Week’s events show that Bungie’s new status an independent developer working with its former parent company is an awkward one. However, it would be difficult for the two companies not maintain some relationship, since Bungie has promised to consult on future “Halo” games and Microsoft still owns a minority stake in the studio.

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