To say that Halo 2 represents a sort of second coming would be nothing less than a massive understatement. The game has taken on a kind of ecclesiastical aura in the minds of hard-core players, with this latest battle for Earth becoming a nascent mythology right up there with the tales of old gods in many ways.
The sequel to the mega sales force of Halo was released yesterday for Microsoft's (NASDAQ:MSFT) Xbox system. Bill Gates was probably sitting in one of the secret lairs of his ultrahuge mansion like a comic-book hero (or villain, depending on your point of view), surrounded by all kinds of advanced technologies that have yet to reach the masses (Bruce Wayne must have had copies of Windows upgrades long before the rest of Gotham, I always assumed), eagerly plotting the revenue curve for the product. After all, users of Sony's (NYSE:SNE) PlayStation 2 can't get this game. Neither can players on the Nintendo platforms. If console gaming is your thing and you want Halo 2, then say hello to Xbox. It's what killer apps are all about.
I anticipate that a lot of Xbox inventories will move because of the title, which essentially is to video gaming what the Beatles were to music in the 1960s. Who else will benefit because of the increased user base? How about publishers such as Activision (NASDAQ:ATVI), Electronic Arts (NASDAQ:ERTS), and THQ (NASDAQ:THQI)? As we all know, when new systems are in new hands, those hands tend to reach for their wallets to start up a library of software, just as DVD players spurn fresh movie sales.
I was watching a special about Halo 2 on Viacom's (NYSE:VIA) MTV the other day, and I remarked to myself what a perfect marketing scheme such a show is -- which led to another thought. I can definitely see why Sumner Redstone is so interested in Midway Games (NYSE:MWY); the MTV networks are a wholly practical synergistic fit in terms of reaching that perfect gaming demographic. Makes sense to me. And I can imagine that copies of Halo 2 will be flying off the shelves for some time to come as that demographic continues to feed off the cool factor that Mr. Redstone's channel has pushed into the young minds. Microsoft will be hoping that something mentioned in the special is decisively implanted in every potential buyer's cranium -- that Xbox Live is an inarguable companion piece to this incredible game. Online gaming is a sector that all publishers want to exploit to full potential.
I can't wait to hear the final accounting of the first-day gross revenue figures; some reports have speculated that it might be as high as $50 million. Microsoft shouldn't be traded based on this one event, since the company's maturing growth won't be turned by it, but it should drive the Xbox brand for the next several months if the company can leverage the phenomenon in a maximal fashion.
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Steven Mallas
owns none of the companies mentioned.
