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Microsoft's 'Halo' Developer to Become Independent

The software giant will keep a stake.

SAN FRANCISCO -- Microsoft (MSFT) - Get Report confirmed Friday that it was allowing its successful Halo game developer unit to go it alone.

But the software company still gets rights to its new games.

Redmond, Wash.-based Microsoft said it agreed to let

Bungie Studios

, the creator of the


franchise, "to embark on a path to become an independent company."

Rumors of a split had been circling on several game blogs.

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Bungie released a statement saying Microsoft, which bought the developer in 2000, will retain a minority equity interest.

But Microsoft still has publishing rights to Bungie's future titles. Released Sept. 25,

Halo 3

, which is exclusive to Microsoft's Xbox 360 gaming platform, sold $300 million worldwide in its first week, the company said Wednesday.

Microsoft was recently trading up 21 cents, or 0.7%, to $29.92.

"While we are supporting Bungie's desire to return to its independent roots, we will continue to invest in our 'Halo' entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the 'Halo' universe" Shane Kim, corporate vice president of Microsoft Game Studios, said in a statement.

"We look forward to great success with Bungie as our long-term relationship continues to evolve through 'Halo'-related titles and new IP created by Bungie," Kim said. Bungie was founded in 1991.

"Working with Microsoft ... allowed us to grow as a team and make the ambitious blockbuster games we all wanted to work on," Bungie founder Jason Jones said in a press release. "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," he added.

The contractual change in Bungie's status "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 platforms. Bungie Studios will remain in its current location in Kirkland, Wash.