Exclusive Interview with Bungie CEO

Friday afternoon, we had the chance to speak to Bungie's CEO and co-founder Alexander Seropian for a better perspective on Microsoft's acquisition of Bungie. Read on for more details on how the deal will affect Bungie's upcoming games - Halo, Oni, and a rumored third project - and will influence the Xbox itself.

GameSpot: How did this deal between Microsoft and Bungie come about?

Alexander Seropian: When the Xbox first was announced, I remember Jason [Jason Jones is a Bungie co-founder] saying, "Hey you know if Xbox is going to be a lot like a PC, maybe we should find out about that because it might be pretty exciting to get into and we could do a pretty good job with it." That was a long time ago.

Not too long ago, probably at the beginning of the year, Kevin Bacchus and Seamus Blackley went around on a little tour and we met them and saw their demos. Afterwards Peter [Peter Tamte is executive vice-president of publishing at Bungie] and I were talking and realized they had a huge job cut out for them, a big challenge, with how they are going to convert on it and make the games.

We called Ed Fries [executive vice-president of publishing at Microsoft Games Division] and chatted with him about it. They came out and told us a little about what they were doing. We told them a little about what we were doing. It started off innocently enough, as just some conversation. The more we got to know them, we realized what kind of opportunity we might have - and they did too - if they were to acquire us. That's basically how it evolved.

GS: Can you comment about Halo at this point? What about the rumors about Halo going to Xbox only?

AS: We're not really talking about that right now. But we're all moving to Redmond. There are a few reasons behind that. We're actually pretty excited about it. One of the reasons is that we're actually going to work with the Xbox guys to help them create the platform. And it's pretty significant to us that we're going to have a chance to shape the platform so that our games and other developers' games take better advantage of the hardware. Jason's already been talking to them about how the Nvidia part works and how the drivers work for it, and he's already coming with a lot of ideas on stuff he can do.

So we're definitely very interested in Xbox. We are definitely hoping to become a premier developer for Xbox, which I think we are now in a very good position to do. But I don't think our future is just Xbox. At the same time we haven't decided exactly what we're going to do. It's just too early.

GS: What will happen to the Mac?

AS: Obviously we have a lot of experience with the Mac. A lot of our fans are Mac fans, and those people are very important to us. We're still going to be making the decisions on what projects we do and for what platforms. But we're also going to be looking at those decisions from the perspective of our areas of expertise and what's best for the game. So I don't really know.

I don't know how much I [have said] about what's happening with Oni, but that's still going to be published by Take-Two and that's going to ship for the Mac.

GS: Within Microsoft you're still going to be an independent studio. What does that mean? Will Microsoft have approval on future projects?

AS: Well, that's what I'm going out there for. I'm going out there to run Bungie. Independent means we keep our management structure. We continue to do the things we do the way we do them. We keep our personality. We're keeping the Web site, Bungie.net, and the people who communicate with our fans. We are keeping our culture. All of this is stuff [Microsoft has] never done before.

At the end of the year the entire Games Group - all the Xbox hardware people and all the game developers for Microsoft - is going to move into new buildings. Bungie is going to be in there, but we're designing our own space. We're designing it to be set up the way that we work. That's something they haven't done before. Not when they bought FASA. The FASA deal worked out really well for them; they're shipping MechWarrior 4 and I've heard a lot of great things about it.

But when they bought FASA, they hadn't quite done this before. They changed a few things about how they work. And I think they've realized they'll probably end up changing them back. That's one of the most flattering things about this whole deal. They admit that we know what we're doing. We have a way of doing things that they think works, and they don't want to break it. It's really the job of Jason and I to make sure it doesn't get broken.

GS: Will there be a name change at all?

AS: It'll still be Bungie Software, with the same logo and the whole deal.

GS: How will you change Microsoft? Everybody is talking about how Microsoft will change Bungie, but you're going to change Microsoft in a way.

AS: Absolutely. It's true and it's very flattering. You know, making games is different from making Microsoft Word. There's a whole different set of people. We've got artists, sound designers, level designers. It's a very creative process.

There's ways [in which] that works. There's ways it could work even better. I think we have a pretty good way of doing things. That's part of what Microsoft is getting and part of what they want, that experience and expertise. And damn they got a ton of it, too. Their testing organization is incredible.

We're going to get their chocolate and our peanut butter. To get to use that testing organization is going to be huge.

GS: How will this acquisition affect the development of the long-rumored third project?

AS: The previously announced and unannounced game? That's not going to affect it at all.

GS: It's still on track?

AS: Absolutely.

GS: And what about the Oni team? Will they move now or later?

AS: They're going to move when they're done.

GS: Do you know when that will be? Many people have been saying October.

AS: I don't think we're going to announce a date. But that sounds reasonable. We're certainly shooting to be done in the fall.

GS: There have been lots of previous reports about other publishers being interested in acquiring Bungie. How did you decide on going with Microsoft?

AS: That's a really easy question. It's true we've had dozens of conversations with other companies which wanted to buy us, and in a lot of those cases if we did anything it would have been about the money. It's not like the money's bad here or anything. It's very good. But this is a lot more about our future, professionally and creatively. This is an opportunity you don't get very often where somebody gives you the chance to be the premier developer for a new console. And it's not just a console, but one that's got a really good shot at being the one.

It's also about having an effect on how it turns out, the actual console itself. That's what convinced everybody to say yes. Everybody on the three teams is coming. We didn't lose anybody.

GS: Can you talk about recent trends that have affected you as an independent developer or publisher?

AS: Obviously, last year we did a distribution deal with Take-Two. Take-Two is a great company and a great partner. Ryan Brant's [CEO of Take-Two Interactive] a great guy. But a lot of the motivation for doing that deal was funding. And we had always been self-funded up to that point. And the kinds of pressures that made us do that deal are the ones everybody's talking about. It takes a lot longer to make games now because the production values are so high, and it's very expensive to do it. The publishing of the games is even more expensive. If you have a really big hit you can do very well, but the majority of games don't do well; they don't do nearly well enough to support the cost of bringing them to market. With Myth II, we did pretty well, but we were also supporting three teams at the same time.

GS: What about the Myth II recall?

AS: That was one of those defining moments. We had a few options open to us. I'm pretty proud of the fact we did what I think was the right thing. It certainly didn't bankrupt us - we survived it - but it didn't help. We're in the position right now where we have to look and think about the decisions we're going to need to make in the next few years.

How many times can you do a deal like that Take-Two deal? Not more than once, really. If we want to be the number one developer - if we want to have the freedom and ability to ride the cutting edge - it's not cheap.

GS: What did you think about Take-Two's purchase of Gathering of Developers?

AS: I think what Gathering did was great. Those are a really good bunch of guys and they work really well with Take-Two. I think they're very good partners and it made a lot of sense. I'm not so sure they had a ton of other opportunities, and that one made sense.

For us though.... I think that the market is changing. A lot of where entertainment is going is into the living room, and it's certainly very exciting. It's a much broader market, much closer to the model of television and movies. One of the financial pressures for us is, if we're getting by in the PC market - even if we're being successfully like we have been - how does one leap into this new, potentially much bigger market without being bankrolled to do it? That's certainly the motivation to do this deal. We did get the opportunity to jump, I think, pretty high up near the top, having the great opportunity to do well in the console market.

GS: In comparison with consoles, do you see the PC market on the decline?

AS: I wouldn't necessarily want to predict it's declining or going away. But I think it's going to change. I think there are a lot of companies that are really good at making electronic entertainment, both computer games and video games. I think a lot of that talent is going to focus on what's good for their games and be good business-wise. People who've wanted to make games more suitable to the PC haven't had a lot of choice with the PlayStation or other consoles before that. And I wouldn't say the PlayStation 2 or the Xbox are much more like a PC, but the production values have caught up or surpassed where the PC is. So you have the opportunity with these next-generation consoles to make games at the cutting-edge level that we like to do things. So I think that might change some things about who's making what games for what machine.

GS: Can you talk about what will happen to Bungie.net in the long term?

AS: We're definitely keeping Bungie.net. The guys who designed it are coming. That's the obvious home for Halo multiplayer.

GS: Was Microsoft interested in you for Bungie.net maybe to integrate it into its own gaming service?

AS: I know one of the things they're excited about is that we have a lot of experience making network games. They think that's a pretty big deal. As for whether a primary motivating factor was Bungie.net and its customer base, that's part of it, but what's more important is just our experience making network games. It's definitely important that we have Bungie.net. It's a way for us to communicate with the fans, and it's very important for us to be able to continue to support that.

GS: If you could say anything to the Bungie fans who might be very skeptical Monday after the acquisition announcement, what would you say?

AS: The reason why we're doing this is all about the games. It's an opportunity to make our games better and bring them to more people. That's what it's always been about for us. We got a lot of flak when we released Marathon [2] for Windows, and it confused us a lot. It's very flattering that people take us personally, but we're not going to change. We're still going to make decisions like we always have. We still have the same creative source of ideas. It might have an effect on when you might see one of our games or what you might be holding in your hands when you're playing, but it's absolutely going to be net positive for the games.

If the fans have any trust in us and if they like us because of who we are, maybe it'll make a difference for them to know that we've really thought about this really hard. We've met all the people out there. We think they're very smart and we're very excited to work with them.

GS: Well, we wish you good luck in Redmond. Thanks so much for taking the time to talk to us, Alex.

AS: Sure.