EA's massive effect on the Xbox 360October 12, 2007: 7:39 PM ET
Uh-oh. Microsoft might be getting its ears Xboxed—again. Six days after Microsoft (MSFT) and the makers of its latest videogame blockbuster, Halo 3 split up, the software giant learned it might lose an exclusive deal with a developer that's about to release another potential Xbox 360 hit, Mass Effect.
Though EA's $860 million purchase of Pandemic Studios and BioWare, the makers of the science-fiction action thriller Mass Effect, won't affect Microsoft this holiday season, EA indicated that it would be preserving its options to port the highly-anticipated video game over to rival platforms. During a conference call with analysts yesterday, EA CEO John Riccitiello said that Microsoft will release Mass Effect on Nov. 20, and BioWare will retain the intellectual property rights. That means the game could be open to the Sony (SNE) PlayStation and Nintendo Wii platforms for its next two sequels.
"We've been on record in the past as saying we want that whole trilogy to be on the 360," BioWare cofounder Greg Zeschuk told GameDailyBiz. However, "we can't predict the future."
A Microsoft spokesperson said it would discuss the matter with EA and BioWare in the following weeks.
Analysts predict it's only a matter of time before EA frees the role-playing game from Xbox's shackles. "The way that EA does business, I would definitely assume that BioWare titles will be open to other platforms. As far as development resources go, that dilutes Microsoft's opportunities," says Billy Pidgeon, an IDC analyst.
A Microsoft spokesperson says that the company relies on its entire games portfolio to drive revenue, but there's no doubt that Xbox sales have benefited from its exclusive hit titles. The first week after Halo 3's release saw Xbox 360 sales double. Since it launched in Nov. 2005, Microsoft has sold 6.3 million consoles in the U.S. through August, according to NPD Research. Thanks to Halo 3, the console's monthly sales for September is expected to out pace the popular Wii. That would be the first time this year.
Microsoft hopes that the release next month of Mass Effect will similarly boost console sales. "Exclusive titles are very important," Pidgeon says. "It's not only the thing that differentiates consoles, but there's also a style of play in the game that's inherent to the console it's being specifically made for."
Last week the Redmond, Wash. software giant announced that Bungie game studio, the makers of the Halo series, was leaving Microsoft to be independent. Microsoft still owns the rights to the first-person shooter franchise, but the split will give Bungie more creative freedom and more choices in developing future games on other platforms. That'll mean Microsoft will need to line up more exclusive deals to feed its console.