The Seattle Post-Intelligencer has an updated story on the to-all-visible-appearances amicable Microsoft-Bungie split, including comments from Bungie studio head Harold Ryan and Microsoft’s Shane Kim.

It’s well worth poring over. Both Kim and Ryan are extremely evasive regarding any of the financial details, but they do say that the Halo intellectual property belongs to Microsoft, and that Bungie is “not bringing in any outside investors”. Not sure if that means that going forward they aren’t bringing in any, or whether there are no investors other than Microsoft and Bungie itself.

That probably indicates either some kind of management buyout, where members of Bungie, perhaps including Ryan, sought bank financing rather than an angel investor in order to buy a controlling stake back from Microsoft, or perhaps a special deal involving future publishing revenue that allowed Microsoft to spin off Bungie as a separate unit with majority control going to some or all Bungie employees without any payment; on that point Kim is silent, saying (several times) that details will not be disclosed.

So, to summarize:

• MS owns Halo
• Bungie will still make Halo games
• Bungie will still make Xbox games
• MS will publish Bungie games, Halo or not

The funniest bit? When Kim tries to dodge a question about a vague statement about Bungie becoming, at some undetermined point in the future, “fully independent” and replies:

Kim: It doesn’t matter about equity stakes. Fully independent, completely in control of their future and doing what they want to do, regardless of who owns what.

Right. It doesn’t matter who owns what. That’s why Microsoft bothered buying them in the first place, and is now spinning them off. Because ownership and control are unimportant. If it didn’t matter, why bother doing it?

Here are more links to articles on Bungie’s bombshell announcement:

Nobody asked Bungie about the rumored separation in the thread for this week’s update, but Frankie dished on it anyway. Effective October 1, Bungie is an independent company with a long-term publishing agreement with Microsoft Game Studios for Halo games.

GameDailyBiz interviewed Frankie about Bungie’s new status.

Kotaku conducted a short email interview with Brian “SketchFactor” Jarrard to find out what’s next for Bungie.

7th Columnist reposts the press release and invites community comments.

The Hushed Casket also reposts the press release, with reader comments.

For other stories, see:

• XboxSolution
• PlanetXbox360
• Xbox360Fanboy
• Major Nelson
• Slashdot
• Kikizo
• MTV Multiplayer Blog
• The Escapist

Mainstream media have also picked up the story:

• Bloomberg
• CNN Money
• Fox News
• Seattle Post-Intelligencer
• Variety

The Macintosh press is having a field day with the news, given Bungie’s track record as an independent game developer with its roots on the Mac platform:

• MacWorld: Never Say Never
• MacWorld: Bungie Leaves Microsoft
• AppleInsider
• MacRumors

There’s not much commentary yet, but John Dvorak weighed in, apparently just before the announcement went public.

Louis Wu at HBO responds with wonga as he is wont to do. There are also threads (one, two) in the HBO Forum.

On behalf of Rampancy’s founder, Ferrex, I’ll say zang as I’m sure he would have, or perhaps even has at some time in the recent past, deep within Bungie’s headquarters for world domination. Perhaps even kudos are in order.

SketchFactor has posted a press release on Bungie.net that declares that Bungie Studios will become a privately held company. Bungie LLC will have Microsoft as a partner and a minority shareholder and will continue to make games for the Xbox.

“Working with Microsoft was great for us, it allowed us to grow as a team and make the ambitious, blockbuster games we all wanted to work on. And they will continue to be a great partner. But Bungie is like a shark. We have to keep moving to survive. We have to continually test ourselves, or we might as well be dolphins. Or manatees,” said Jason Jones, Bungie founder and partner.

Certainly the only thing more shocking than Bungie selling itself to Microsoft in the first place is somehow managing to escape its embrace to assert independence again. One is given to wonder, after all but completely dismissing the possibility of this happening, why and how it has happened.

Part of the press release, as well as the mounting pressure on Bungie to keep the Halo juggernaut rolling and rumors swirling around the possibility of Bungie leaving Microsoft suggests the reason why:

“This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organizationally in our mission to create world-class games,” said Harold Ryan, studio head for Bungie. “We will continue to develop with our primary focus on Microsoft’s platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios, and we look forward to continuing that affiliation through ‘Halo’ and beyond.”

The “Halo and beyond” bit certainly hints what many Bungie watchers thought and desired for since Halo 2 and 3 were announced: a new Bungie intellectual property not based in the Halo universe. Then Phoenix was cancelled, and no non-Halo announcements were forthcoming.

Perhaps Microsoft did expect Bungie to continue with and endless series of Haloverse shooters, as well as getting Halo games from Wingnut and Ensemble.

If that’s the reason why this happened, that Bungie wants to make non-Halo games even if they do continue to work on Halo related games, then the question becomes, why Microsoft was opposed to that. The answer to that probably explains the how as well.

In the end I can only guess that either the people at Microsoft who initiated the Bungie purchase, or the people who came into decision-making positions more recently began to look at that acquisition less in terms of personnel and creative vision and more in terms of a single intellectual property: Halo. Microsoft didn’t buy a creative and inventive force for developing games, this train of thought runs, it bought the Master Chief and Cortana.

In that mode of thinking, what is Bungie worth if they’re not developing a Halo game? What are they worth if only half of them are developing a Halo game? Is it worth the risk to find out if they can have a hit that doesn’t have “Halo” in the title?

One may be forgiven for momentarily expressing some sympathy for this viewpoint. After all, Bungie’s Halo games were their biggest sellers. The Halo games themselves are highly derivative of their earlier game, Marathon. Oni was not a terribly large success. Everything before Marathon was small-time even in the small Macintosh market, and while the Myth and Myth 2 RTS games sold well, there are other studios already working on games like that for the Xbox, including Ensemble Studio’s Halo Wars project. Where was the incentive to let Bungie roll the dice on a new property, staked by Microsoft’s fat wallet?

Somebody sure felt that was a good bet, though. The new deal says Microsoft will retain a minority stake. It also thanks one Don Leeds at B-Hive Global, LLC for structuring the deal and negotiating for Bungie. Interestingly enough, check the Team page at B-Hive and you’ll find the name Nile Rodgers, about whom it says:

In 2005, he contributed to, executive produced, manufactured and distributed an original soundtrack to the Microsoft X-Box video game title “Halo 2: Original Soundtrack Vol. 1.” This title has become the number one selling video game soundtrack of all time.

Having worked with Marty O’Donnell on the soundtracks, Rodgers would certainly be in a position to judge Bungie’s possible worth as an independent entity able to continue to be creative and successful without being shackled to the Master Chief’s heavy armor forever.

If Microsoft is a minority shareholder, who are the other shareholders now? Microsoft isn’t altruistic, it’s not going to let Bungie walk right out the door without compensation. Continuing to develop games for Microsoft platforms is fine well and good, but if Microsoft is going to go from owning an asset to owning only a non-controlling interest in an asset, I’m betting they get paid for that. Who paid them and how much?

Somebody out there thought it was worth shelling out some cash– perhaps a large amount of cash, almost certainly more than Microsoft paid for Bungie in the first place– to see what Bungie can do developing non-Halo games.

Somebody knows a good bet when they see one.

Oh, and give Bungie partial credit for Step Six in their plan for World Domination. They may not own Microsoft now, but certainly there is something to be said for getting them to buy you and reaping the rewards of that, having three megahit games promoted all over the world, and then regaining your independence. Start checking Google Earth for a giant slingshot in Bungie’s backyard.