Vidgame series earns $2 billion, but where's the film?

Microsoft has managed to do something so many studios have spent countless millions of dollars trying to achieve over the years but often failed at: launching an equivalent of “Star Wars.”

The company turned its alien-invasion vidgame epic “Halo,” created by Bungie Studios, into a major franchise that has earned $2 billion since the first title bowed nearly a decade ago. It’s a feat few vidgame publishers can boast, outside of Activision Blizzard’s “Call of Duty” series and anything featuring Nintendo’s Mario Bros.

And there’s still a lot more money for Microsoft to make from “Halo,” with a film adaptation still in the company’s sights, as well as a blitz of licensed products to complement a successful line of toys (including “Halo” versions of boardgames “Risk” and “Monopoly”), action figures, apparel, anime movies, soundtracks, novels and Marvel comicbooks on store shelves.

Halo: Reach,” the fourth installment in the franchise, is expected to ring up blockbuster biz when it storms into stores Sept. 14, almost guaranteeing that “Halo” will live on in sequels and spinoffs for years to come. Since the first game bowed in 2001, the series has sold some 34 million copies.

Also helping build Microsoft’s brand is Madison Avenue, which has fully embraced the franchise’s main character, Master Chief, and turned him into a pitch soldier, with PepsiCo plastering him on 300 million Mountain Dew cans and 30 million bags of Doritos for the launch of the latest game. Ultimate Fighting Championship is also a tie-in partner, and 7-Eleven has previously ponied up marketing dollars around the games.

In fact, “Halo” has become such a pop culture phenomenon that fans routinely produce their own Web shorts, such as the long-running “Red vs. Blue,” or suit up as the game’s Spartan soldiers to march past platoons of “Star Wars'” Stormtroopers at events like Comic-Con. Madame Tussauds, in Las Vegas, erected a wax figure of Master Chief, and the game’s characters have wound up in TV shows like “The Simpsons” and “Family Guy.” A group of dancers dressed like Spartans even appeared recently on “America’s Got Talent.”

And just as “Halo’s” overall design and gritty gameplay is influenced by movies such as “Aliens,” “Black Hawk Down,” “Saving Private Ryan” and “Starship Troopers,” its look has started to rub off on other high-profile properties like “Avatar.” Just compare the helicopter-like vehicles soldiers in both projects fly.

“We like to joke, what came first, ‘Avatar’ or ‘Halo?’ ” says Marcus Lehto, creative director of “Halo: Reach” and one of Bungie’s original gamemakers.

Jokes aside, Bungie’s commitment to building “Halo” into a major moneymaker for Microsoft isn’t something it takes lightly. It’s been carefully nurturing the property since back in 1999.

“Halo” was originally aimed to launch as a more traditional computer game for Apple and Windows machines. But Microsoft saw something with durable appeal in Bungie and its game concept. It bought Bungie in 2000 for an estimated $20 million to $40 million and moved the company’s staff from Chicago to the Seattle area to redevelop “Halo” as an exclusive title for its Xbox.

“The goal was to create a cool launch title that showed off the features of the Xbox,” says Frank O’Connor, who oversees the “Halo” franchise for Microsoft and was a former content manager at Bungie.

As history proved, the purchase paid off, with “Halo” quickly taking off with gamers in 2001, giving Microsoft the ammo to make its Xbox platform a serious rival to Nintendo and Sony’s well-established consoles. In 2004, “Halo 2″ helped launch Xbox Live as a way for gamers to connect socially and compete against each other online, and would again give Microsoft the marketing muscle to introduce the improved Xbox 360 console in 2005. The “Halo” games are still the top-selling titles for the Xbox and Xbox 360.

“A lot of things would have been different” had “Halo” not existed,” O’Connor says. “The console space would definitely look different. Our ability to compete with Sony and Nintendo would have been affected.”

Beyond the games themselves, Microsoft has published six “Halo”-related novels since 2001, all of them bestsellers. It launched a graphic novel series, including strategy guides, through Marvel in 2006, and the line has sold more than 6.3 million copies. It introduced “Halo Wars” and “Halo 3: ODST” as spinoff games last year, and the self-financed “Halo Legends” anime series, released through Warner Home Video in February.

Each spinoff has served to tell a larger “Halo” story that focuses not just on the Master Chief but on the rest of the characters and creatures, O’Connor says. As the franchise’s development director, O’Connor says his job is not to pump out more product but to “protect the franchise.”

“I don’t have a mandate by management to grow it by any numbers,” he says. “The mandate is to grow it naturally.”

For each new product tie-in, Bungie is closely involved in approving the design of characters, down to the subtle coloring of the military suits, and the storylines, based on the extensive bible the gamemakers have refined over the years. That bible is so richly detailed it led to a “Halo” encyclopedia and art book. Bungie’s also provided digital models to McFarlane Toys and other licensing partners.

“Halo’s” creative stewards say the secret to the franchise’s success lies in the Halo universe itself — a parallel they see in a certain other durable franchise.

“We have a lot in common with ‘Star Wars’ when it comes to having a big universe, recognizable characters and fundamentally really cool stuff,” O’Connor says. “A lot of studios and film companies and game companies have tried to create (their own “Star Wars”). (But) you can’t set out to make a successful franchise on purpose. It has to be something that fans are attracted to and love. There’s only so much you can do to achieve that deliberately. But it always comes down to a great story and characters.”

The key character for “Halo,” of course, is Master Chief. He’s taken on a life of his own, with an interesting back story, O’Connor says.

But that durable icon has also become something a hurdle for Microsoft as it looks to develop a movie.

The faceless character has never taken off his helmet, potentially making it difficult for auds to connect with him. Instead, he’s been surrounded by characters out of uniform who can move plots along.

For hardcore fans, developers have thrown in some firsts in the new title, like playable space battles. But the aim now is to click with wider auds and pave the way to a bigscreen adaptation.

“We’ve done a lot of work to make sure ‘Reach’ is something that’s interesting not just to males but females as well,” Lehto says.

In “Halo: Reach,” gamers don’t play Master Chief but a soldier they’ve created, giving them more of an emotional connection to the overall game. Players can customize their characters, choosing which gender they want to be, as well as the character’s voice and suit design. Their character is also integrated into the movie-like cut-scenes that play throughout the game and reveal the storyline.

With such a cinematic feel to the games, some in Hollywood wonder why a bigscreen adaptation hasn’t yet come together.

Plans to produce a big-budget tentpole for summer 2007 were aborted after co-partners Universal and Fox balked at an escalating budget that was starting to rise beyond the $135 million pricetag that had initially been hammered out by Microsoft, producer Peter Jackson and director Neill Blomkamp.

Ironically, that wouldn’t seem to be a hurdle today. U is now making a $200 million actioner based on the Hasbro board game “Battleship.”

But in 2005, when “Halo” was close to getting a greenlight, videogame movies were still struggling at the B.O., and it didn’t help that Universal’s adaptation of “Doom” was a dud. Movies based on toys, like “Transformers” and “G.I. Joe,” are considered safer bets.

Studios were also irked by the perceived arrogance of Microsoft at the time.

Guided by Creative Artists Agency, couriers dressed as Master Chief marched onto studio lots with a script by Alex Garland and demands of $10 million against 15% of the B.O. gross, in addition to a $75 million “below-the-line” budget and a fast track toward a greenlight. Studios had 24 hours to accept the terms after reading the script. The game had sold only 13 million copies at the time.

Test footage, featuring vehicles and visual effects by Jackson’s WETA Digital, wound up online, giving fans an intriguing taste of what might have appeared on the bigscreen, as did “District 9,” the alien sci-fier that Jackson and Blomkamp wound up making instead, and which became a hit for Sony.

Microsoft retains the film rights to any future “Halo” movies, and is still eager to produce a film when a budget and plotline can be worked out. It’s still developing scripts by Garland, Stuart Beattie, D.B. Weiss and Josh Olson as potential blueprints.

“We’re still interested in making an excellent ‘Halo’ movie,” O’Connor says. “We’ve created an awful lot of documentation and materials to support a feature film. We have a good idea of what kind of story we want to tell, but won’t move on it until there’s a great reason to do it. We’re in no particular hurry.”

Any film would likely serve as a standalone story and not be “a verbatim retelling of the game,” O’Connor says — something screenwriter Weiss also has hinted at in interviews, saying, “If you did do a 100% faithful version, 999 times out of 1,000 it would be a mess.”

Microsoft is also “intently watching” the TV landscape as a potential outlet for a “Halo” series.

For now, it’s relying on commercials director Noam Murro to helm a series of live-action short films, including “Birth of a Spartan” and “Deliver Hope,” and TV ads that introduce viewers to what life was like on planet Reach before it was invaded by aliens.

” ‘Reach’ was this opportunity to come full circle and get back to our roots and see how it all began,” Lehto says, underscoring that the game isn’t the origin story of Master Chief but the foundation of what led to the first battle between the humans and their alien foes.

While “Halo: Reach” is a new chapter in the game series, it also marks as Bungie’s swan song from the franchise it created in 1999.

In April, Bungie’s original team officially walked away from Microsoft for a 10-year development deal with Activision Blizzard to launch a new action franchise. As part of the pact, Bungie will own the rights to its new titles, while Activision gets exclusive rights to distribute the games in return for financing potential new franchises and receiving a favorable percentage of the revenue.

“It’s bittersweet for us to say goodbye,” says Lehto. “But we put everything we could into this game to make sure our final sendoff of ‘Halo’ is the best it possibly could be.”

Despite the departure of its original creative team, “Halo” is too important a property for Microsoft to retire it anytime soon. The next round of games will be shepherded by 343 Industries, Microsoft’s internal studio.

In fact, Microsoft is spending more money around the launch of “Halo: Reach” than it has around any Xbox game to date, with a pricey campaign that includes letting gamers manipulate a robot in a San Francisco warehouse to build a monument of laser lights.

The goal is to beat the $170 million first-day record “Halo 3″ set in 2007, but which has since been conquered by Activision’s “Call of Duty: Modern Warfare 2,” which raked in an astonishing $310 million in its first 24 hours last year.

Early interest is positive, with a beta version of the game attracting more than 2.7 million players earlier this year. But whether “Halo: Reach” beats records doesn’t necessarily matter — although the videogame biz is in desperate need of a hit title to prop up a year disappointed by sluggish sales that are down 8% so far over last year.

Microsoft wants to make sure “Halo” continues to thrive in the same way any Hollywood studio likes to keep its franchises alive and introduce them to new generations.

O’Connor says the two industries share a lot of similarities.

“Just getting to the point where you have a franchise is the hard part,” he says. “Once you’ve got one, there’s a lot you have to do to build its future. We’re very much brothers and sisters in terms of the kinds of things we put on peoples’ screens. The main difference is (that) ours are interactive.”

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