Halo: The Power of 3

September 25, 2007. This date likely holds no significance for you. But for millions of rabid game fans, September 25 was akin to a holiday--like Christmas and New Year's Eve rolled into one awesome day when they got the exact present they requested and then had to call in sick after going on an all-night bender playing it.

Fans lined up for hours to receive their copy of Halo 3 at 12 a.m. And for Microsoft, Xbox and Bungie Studios (the game production studio that, up until last week, was owned by Microsoft), it paid off with more than $170 million in U.S. sales the first day. The game brought in more than $300 million worldwide in the first week. It also doubled sales for the Xbox 360 in the first week of release, and nearly 3 million people played the game online on Xbox LIVE that week.

The phenomenal success of Halo 3 is the result of a confluence of elements. Of course, Microsoft threw a load of money into marketing, but money alone doesn't garner the fanatic devotion bestowed upon Halo 3. The multiplayer gameplay is legendary, and the open-ended environments encourage replay. "The replay value has no equal," says Scott Davis, a huge fan from San Francisco who not only purchased both an Xbox 360 and HDTV LCD solely for Halo 3, but also sent Bungie Studios a thank-you note.

The Trilogy's Draw
But Halo 3 is also the stuff of great literature: It's an epic journey of good vs. evil. The world is at stake. It's a hero's quest, and with Halo 3, the quest came to an end, providing a strong impetus for even lackadaisical fans to jump back on board. After all, who wouldn't want to know what happened to Master Chief, the game's helmeted hero--and the only hope to save the Earth?

"With a limited series such as Halo, you create the illusion of supply and demand," says Dave Perea, a writer and comic book publisher who also works on video games for studios like Disney Interactive. "This is the last Halo; you must have it! People feel a part of something special, especially if a franchise leads to the most lucrative of groupings: a trilogy."

Josh Goldberg, product manager for Xbox Games, says the trilogy made sense in a lot of ways. "[It] worked well ? from both a storytelling and development standpoint. It made sense to wrap it up with a decisive and final end to this story arc--one that our fans have been following for over five years. Not only does it bring closure to them, but it also frees us up to explore other potential stories within the Halo universe."

But we believe there's a particular magic to the trilogy and that entrepreneurs should take note of Halo 3's success. Even though gamers know the Halo games won't likely end soon, the realization that Master Chief's story arc was ending was enough to throw sales into overdrive. "We believe that the trilogy concept clearly had a positive impact on sales," says Gary Rudman, president of GTR Consulting, a market research firm focusing on kids, teens and young adults. "Gamers want to see how it ends, so they continue to buy."

Bungie and Microsoft did other things right as well: "There are a number of key takeaways from Halo 3 for entrepreneurs," says Rudman. First, do your homework and know the audience. Second, don't accept shortcuts. "Halo 3 was released quite late because they were tweaking it," he says. Third, take advantage of the equity in a successful series and understand how to generate excitement. Finally, a hit with a shelf life helps confirm that a product is current and not stale. "Consumers and business people want to feel they are getting the latest and greatest," Rudman adds. "They appreciate improvements on the previous iterations."

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