Halo Reach Sales Top Out At 358 Million

Sales of console up 38 percent year-over-year, cited as a factor in company's record first fiscal quarter performance; Entertainment and Devices Division sales tally $1.8 billion.



Microsoft has been banking on the motion-sensing Kinect peripheral to boost sales of the Xbox 360 this holiday season, but it turns out the system has had no trouble selling in advance of the camera system's November 4 launch. The company today announced a record performance for its first fiscal quarter (the three months ended September 30), with Xbox 360 sales up 38 percent year-over-year.





Microsoft's revenues Reach-ed for the stars.

The Entertainment and Devices division, which handles Microsoft's gaming business, as well as projects like the Zune and ill-fated Kin phone, posted nearly $1.8 billion in sales. Microsoft claims that number is up 27 percent year-over-year, but only since it has "recast" previous results "to conform to the way [Microsoft] internally managed and monitored segment performance during the current fiscal year." In last year's first fiscal quarter results, Microsoft reported Entertainment and Devices division revenues of nearly $1.9 billion, essentially flat from the prior year.



The Xbox division's operating profits were also affected by the aforementioned recasting. For the recently concluded quarter, Microsoft posted a divisional operating profit of $382 million, claiming that was up from the previous year's $260 million operating profit. The original number Microsoft reported for its first quarter last year was $312 million.



Companywide, Microsoft touted its all-time best first fiscal quarter performance. Every business unit in the company showed sales growth, and revenues for the three months ended September 30 totaled $16.2 billion, up 25 percent from the prior year. Net income surged even more, jumping 51 percent to $5.41 billion.



Microsoft cited strong consumer demand for the Xbox 360 and its games, as well as Office 2010 and Windows 7, as contributing factors to the growth. While Microsoft didn't break down the numbers, it bears noting that the quarter saw the debut of Halo: Reach, which was credited with bringing in $200 million in sales in its first day on sale. According to the industry-tracking NPD Group, Halo: Reach was also the top game for the month of September, selling 3.3 million units at US retailers.



[UPDATE]: In a post-earnings conference call, Microsoft revealed that Halo: Reach had totaled approximately $350 million in revenues to date and helped drive strong growth in the Xbox Live service.



The company expects to retain its momentum with the help of Kinect. Microsoft is projecting roughly 30 percent year-over-year revenue growth for the current quarter, with a jump of about 20 percent for the full year ending June 30, 2011.

Beyond the Ring: Bungie's Renegade Development of Halo's Fiction

An auditorium full of people sit at the Microsoft E3 press conference in 2006, all waiting for the same thing. It's just seven months since the Xbox 360 successfully launched, but Microsoft's big gun has yet to show for the new system. The audience expects that to change, and they're right. The giant screen goes white, and a single piano note signals the debut of Halo 3. As the camera pans across a blasted desert road, the AI Cortana speaks.







"I am your shield. I am your sword."



While everyone else is hanging on the edge of their seat to see what happens next, some hardcore fans of the Halo series hear something familiar in Cortana's cryptic message.



"I know you. Your past. Your future."



"This is the way the world ends."



The audience applauds and gaming sites report on the expected release date, but elsewhere, on forums, Bungie devotees are buzzing about something else. Conversations spring up about a series of letters seven years old, letters largely forgotten from a time before the 24-hour gaming news cycle. Why? Because by now, Halo fans know that they're as likely to learn about Halo's sweeping fiction outside of the game as they are in it. After a number of New York Times bestselling novels and arguably the first massive, mainstream Alternate Reality Game in the form of the "I <3 bees" campaign they're well trained.



Over the course of its 10-year lifespan, Halo has managed to build up a wealth of story spanning hundreds of thousands of years and numerous star systems, a story of politics and civil unrest in addition to a genocidal war waged by an interstellar religious armada against the human race. Halo's fiction is arguably among the most expansive that gaming has ever seen -- impressive, given the perceived limitations of first-person shooters.



Where shooters like Half-Life 2 have found success through an incidental, found story peppered throughout their world as well as direct narrative, Bungie has taken a different path, going outside of their games in ways both traditional and radically different. In the process, Bungie and their now former partners at Microsoft created a uniquely successful combination of merchandising, marketing, and storytelling to explore the world of Halo in a deeper way than they originally thought possible.