OCTOBER 5, 2007 — just weeks after Bungie Studios unleashed Halo 3 — news emerges that the developer is set to leave Microsoft and return to its independent roots. The split hailed an end to Microsoft’s near-eight-year ownership of Bungie, a company it bought on the strength of a one-level game demo called Halo.

You've come a long way, Master Chief.

Before moving to Seattle from Chicago to join Microsoft in 2000, Bungie was still a relative unknown, a developer bursting with ideas but one yet to realize the true scope of its potential. Now, almost a decade on, Bungie has grown into one of the world’s leading game developers — a company once again ready to take its destiny into its own hands.

FINISHING THE FIGHT

Given the magnitude of the split, Bungie’s first days as master of its own destiny were surprisingly low-key. Within days of Halo 3’s launch, senior staff members were back in the office steering the studio on its new course, aware that with Microsoft’s safety net removed, it would now live and die by its own decisions, successes, and failures.

“I took about two days off before moving on to another project we’d been working on for a couple of years,” recalls Paul Bertone, Halo 3’s design lead, who joined the company shortly after the Microsoft takeover. “It wasn’t a case of ‘We’re the new Bungie, what are we going to do now?’ We already had things we were working on.” With two projects canned during the development of Halo and Halo 2 (much to the chagrin of the team), Bungie’s newfound freedom is finally permitting it to dedicate itself fully to multiple projects.

"The main reason we did this was to keep Bungie together," says Bungie artist Marcus Lehto.

These determined (yet unassuming) new beginnings were a world away from what had transpired just days earlier during the company’s final, momentous collaboration with Microsoft — the launch of Halo 3. “I was in Seattle at the Best Buy retail store with about 1,000 fans for the launch,” recalls community and PR director Brian Jarrard. “It was Microsoft’s biggest-ever launch event. We had simultaneous groups of people in six cities around the U.S. and in Europe.”

But the manic fan reception that greeted Halo 3’s launch in Seattle was to prove a mere sideshow compared to the stunning scenes that were simultaneously taking place in Los Angeles, where head of production Jonty Barnes was witnessing the biggest launch in gaming history: “An entire city street had been closed for the launch,” he recalls. “Throngs of fans were chanting our name. Some people had even been lining up for two days to be at the event. While I was meeting the crowd, [some] 50-year-old TV-news reporters kept coming up to me with their camera crews, asking about ‘some Master Chief guy.’ It was absolutely incredible. It really was like the release of a Hollywood movie. It was one of the most amazing nights of my life, and a very humbling experience. I think Halo 3’s launch announced to the world that games are now on-par with movies.”

THE PIRATE PLAY

After such a lavish conclusion to its tenure at Microsoft and with the Halo trilogy finally rounded off, it was time for Bungie to once again find its own way in the world of games development. But the decision to break away from the world’s most powerful software-publishing company had not been made lightly, and as artist Marcus Lehto reveals, it was the culmination of several years of internal soul-searching.

“It was ’round the time we were finishing Halo 2 and negotiating a new deal with Microsoft that we first had the idea of becoming independent,” he says. “The idea was to become independent if we couldn’t work out a deal. But it was a really risky move and we knew that if we’d gone through with it then, it would have been mainly the senior members of the team leaving to start a new company from scratch. We called this the ‘Pirate Plan.’ Going ‘Pirate’ was an option, but that wasn’t something we really wanted to do because it would have meant leaving behind so many great people.”

There is a method to Bungie's office madness. Really.

After intense negotiations with Microsoft, the plan for independence was put on the backburner as Halo 2 shipped and work began on Halo 3. But throughout the game’s development, Bungie was becoming increasingly aware of what might happen after the game’s release. “We wanted to make sure that post–Halo 3, we had a company that we could believe in — one that would last for another decade,” explains Lehto. “We just didn’t see that being possible as part of Microsoft. We concluded that while Microsoft was and would continue to be a fantastic partner, we didn’t see it as a parent in our future.

“Our main concern was that if we stayed at Microsoft, we’d start hemorrhaging important people. At that point, Bungie would cease to exist. Ultimately, the main reason we did this was to keep Bungie together and ensure that we had creative control over future projects.”

Bungie's mantra: Build, test, tweak, test again. Keep testing.

The decision to become independent had been a guarded secret among the upper echelons of Bungie’s hierarchy and throughout the final stages of Halo 3’s production. Held back by legal restrictions and a desire to keep their team focused on the task at hand, Bungie’s management was forced to try to strike a balance between reassuring its staff about its future without actually revealing any concrete details that would somehow end up jeopardizing the deal.

“It was a tremendous emotional drain,” describes Lehto when recalling this time period. “The problem was that we couldn’t legally talk to the team about it. We had to sit on the news for a very long time.”

THE MOMENT OF TRUTH

Perhaps the most memorable moment in Bungie’s illustrious history came on a bright August morning, when the entire staff congregated at a hired movie theater for a company meeting. “There we all were, a big Bungie family, all gathered and wondering what the heck was going to happen next,” says Lehto of that day.

Also present at that announcement was Jarrard: “Harold Ryan, the studio head, took the stage and gave a PowerPoint presentation. The opening slide said ‘Bungie: A Microsoft Games Studio.’ Then there were a few slides about the success of Halo. At the end of the presentation, a slide appeared that said ‘Bungie: An Independent Games Studio.’ That was the moment when everyone suddenly realized what was going on. The whole place went crazy with cheering.”

They call it a workspace -- more work thans space, it looks like.

It was an unexpectedly euphoric response. “We were ready for a coup in case the news didn’t go over very well,” explains Lehto. “We thought that some members of the team might sandbag the idea, but it didn’t happen. We’d second-guessed how everyone would respond so much that we were convinced there’d be some kind of disaster, but everyone was just full of joy. It was an amazing moment.” That very same day every Bungie employee signed the Bungie Declaration of Independence — a document that outlined all the goals of this now self-sufficient games studio. It heralded the dawn of a new era.

But while the news was a complete shock to most of Bungie’s staff, the protracted discussions between Bungie and its owner meant that the announcement didn’t come as a shock to Microsoft. “I don’t think it was too much of a surprise to them,” continues Lehto. “It was something that had been brewing for some time, and we’d always been very open with Microsoft about our relationship.”

Covenant capital ship? Nope, Bungie's server room.

Having been present in the days preceding Microsoft’s takeover, Lehto believes that Bungie has benefited hugely from its association with the publisher. “We learned to be more disciplined while we were at Microsoft. We’re a much more mature company now than when we first moved here from Chicago.”

A FRANCHISE WITH A RING TO IT

With the Halo trilogy finally complete, one burning question remains: What does the future hold for Halo, and what part will Bungie play? “Now that we’re independent, it’s not entirely clear how much involvement Bungie will have in the future of Halo,” explains Jarrard. “Currently, we still have people who are devoted to working closely with Microsoft on the licensing aspects of the franchise to help ensure accuracy, consistency, and quality. Many people at Bungie still love the Halo universe, and we’ll try to continue supporting and nurturing the franchise as much as we’re able. But ultimately, it will be up to Microsoft.”

So begins a new era at the world’s most famous games developer, an era in which Bungie hopes to explore new avenues of creativity, create new worlds, and take gaming into fresh and exciting realms. “There’s a general feeling here that we have more responsibility for what we’re doing on a daily basis because it’s going to have our name on it,” Bertone tells us. “When you’re a part-owner of something, you really pay more attention to it. We’re also working on more projects now, which means we can explore some great new avenues.”

Given Bungie’s blockbuster background, though, does the company feel pressure to create bigger games, rather than experimenting with smaller, quirkier products? “There’s certainly a pressure to do bigger and better all the time,” explains Barnes. “Part of that is the Bungie culture. Some of the more creative people at Bungie have become more outspoken about their game-design ideas since we became independent.”

Master Chief guards the Bungie lobby. You have clearance, right?

Lehto agrees. “After we’d finished Halo 3, we allowed everyone to submit game ideas for a future Bungie title,” he says. “It was tough to mediate, because there were so many great ideas, but ultimately it proved that a large majority of the team are on a similar wavelength.”

SILENT CARTOGRAPHERS

As is the norm in the top-secret world of games development, Bungie remains mum about what it’s working on until its publishing partners give the green light. Bungie did let slip, however, that it’s currently working on at least two new projects, and that it’s keen to further explore the possibilities created by Halo 3 features like Forge and Theatre.

Basketballs and weaponry? Welcome to the Bungie break room.

“We want to bolster user-created content for the future,” claims Barnes. “Anything we can do to help people create compelling experiences in our games, we’ll do.”

What the company will do next may be impossible to predict with concrete accuracy. But if Bungie’s insatiable desire to succeed and improve are anything to go by, then the studio’s best days could well be yet to come.