Microsoft's 'Halo: Reach' Racks Up Over $200-million In First Day Sales

On its opening day, Microsoft's newest video game, Halo: Reach, racked up over $200 million (U.S.) in sales (U.S only). These launch day results continue to bode well for Microsoft, and increase the momentum for Microsoft's November launch of the new Xbox 360 gaming system. Additionally, with Christmas approaching, Halo: Reach, the latest installment from the Halo series, is a key product for Microsoft. Many expect this Christmas to be extremely competitive, particularly within the gaming market, with arch rivals Nintendo and Sony Corp. set to launch new products. Over the last year, the $60 billion gaming industry has suffered as consumer spending and confidence have eroded. This erosion has made many within the segment nervous. While the gaming sector has continued to perform, many analysts have speculated as to the cause in the sector's dip. Are sales contractions due to the low number of quality game titles available? Has game quality decreased? Are consumers within the gaming segment more price sensitive than analysts previously acknowledged? And finally, how much do games sales influence console sales, online subscription revenue, and customer loyalty?

Overall, Microsoft believes that the poor performance within the gaming segment is due to scarcity of blockbuster games. In a recent interview, Phil Spencer, the vice president of Microsoft Game Studios, argues that Halo: Reach's performance illustrates just how important good games are to the gaming software and hardware industry. He argues that the success of Reach will positively impact console sales for the XBox 360. Additionally, he noted that, with the number of gamers playing online increasing, Halo: Reach's superior online performance would significant increase sales of Microsoft's Xbox Live subscriptions. While he did not provide figures to support his arguments, he noted that, "What Halo: Reach numbers tell me is that gamers are there. They are willing to buy the great experiences when they come out. In fact, that we are exceeding Halo 3 numbers out of the gate tells me that the industry is in a healthy state." According to market data, the $200-million launch payout has made Reach the biggest launch of any video game or movie this year in the United States. From a comparative perspective, Halo 3 garnered more than $300-million globally in its first week. First-day global sales for Halo 3 are still unavailable, but analysts expect them to be significantly higher than the $300-million tag.

Reach, a prequel to the main Halo narrative, pits players against murderous aliens in a variety of settings. The game, provides better graphics, better weapons & equipment, more complex fighting scenarios, and enhanced online play (including the much anticipated Forge World which absolutely ROCKS!!). In total, the Halo franchise has sold more than 34 million copies in its nine-year history, and played a key role in boosting the popularity of Microsoft's Xbox console. Since its inception, the Halo franchise has grossed nearly $2-billion in sales, and contributed to significantly improve the financial performance of both Bungie and Microsoft who own the rights to the franchise. To provide variety, Halo reach is being sold in multiple additions with varying price points. The basic version of Reach costs $60, while special editions are priced at between $80 and $250. Microsoft has also created a special Xbox console bundle, and is selling the console plus the new version of the game for $400. While Halo continues to be a huge success, Microsoft's next biggest launch is set for November 4th. On November 4th, Microsoft will begin selling its "Kinect" full-body motion-sensing game system, a system that will compete directly with Sony's "Move" motion-controlled gaming system that was launched on Sept. 15.