Is Halo Really Growing?

Halo 4 minted $220 million in day-one global sales, besting Halo: Reach and Halo 3, but breaking down the data shows Master Chief may be losing his edge.


Halo 4

With day-one sales of $220 million (and projections for $300 million in first-week sales), Halo 4 got off to a better start than any other Halo game to date. Microsoft even claimed its new shooter outpaced day-one United States box office results for Harry Potter and the Deathly Hallows: Part Two and The Avengers, and was the "biggest entertainment launch this year." The superlatives continued, with Microsoft calling the Halo series "one of the most popular entertainment franchises in the world" and claiming Halo 4 is a "record-breaking" and "must-have blockbuster."

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In all, the Halo series now has tallied $3.38 billion in revenue, but is Microsoft's crown jewel growing at any appreciable rate?

Halo 4's $220 million day-one mark was only $20 million better than Halo: Reach's $200 million haul in 2010 and $50 million better than Halo 3's $170 million take in 2007. (This despite Microsoft investing more developing Halo 4 than any other game in the company's history) To be clear, millions of dollars in year-over-year growth is nothing to scoff at, but Microsoft left out important sales-by-location details yesterday when announcing Halo 4's record-breaking launch.

Halo 4's $220 million represented worldwide sales across 40 countries, while Reach's $200 million mark only took sales from North America and Europe into account. And Halo 3's $170 million haul was derived from United States sales alone, not even Canada. Viewed using that lens, Halo 4's $220 million no longer looks so impressive.

Adding to the complexity (and the possible further dilution of Halo 4's $220 million day-one haul), Microsoft did not say if Halo 4's launch figure included revenue from the $350 Halo 4 Limited Edition Xbox 360 console, $60 special edition controllers, $25 official strategy guide, $10 soundtrack, or the $25 War Games map pass. [At press time Microsoft had not responded to GameSpot's request for comment] Revenue derived from the War Games map pass (something Halo: Reach and Halo 3 never had) should not be overlooked as some small figure. GameStop's director of digital content Brad Schliesser told GameSpot last week that the retailer had attached this DLC to all sales at a rate of 13 percent. And that's at just one retailer.

In an effort to make more sense of Halo 4's launch figures, GameSpot got in touch with Wedbush Securities analyst Michael Pachter. The industry diviner told us that he does not see Halo 4 performing any better than past games Halo: Reach and Halo 3.

"I think they’re pretty comparable, and think that Halo 4 will probably end up around the same as the others. With that said, the first four did $3 billion in sales, or $750 million apiece, so that’s around 12-13 million units each. I think that this one will comfortably sell 8 million within six months, and am not particularly concerned about first-day or week sales," Pachter said.

We also spoke with Electronic Entertainment Design and Research (EEDAR) analyst Jesse Divnich. He said it was no surprise that Halo 4's day-one numbers were bigger than Halo: Reach or Halo 3's, partially because the Xbox 360 install base has steadily grown. [The Xbox 360 has been the top-selling console in North America since October 2011]. That said, he does not anticipate Halo 4 overtaking the sales milestone notched by Bungie's final entry, Halo: Reach.

"Halo 4 sales were in-line with expectations," Divnich said. "As we get deeper into a series within the same console cycle, it is expected that initial sales will grow. However, we don't believe that long-term sales will outpace Halo: Reach and instead sales are likely to be flat over the course of the first 12 months. It's common for first-day, week, and month sales to outpace previous iterations, again when late in a cycle, but over the long-haul sales are likely to be flat."

Halo 4's record-breaking $220 million debut may have been the eye-catching headline yesterday, but Divnich was more impressed with the series handover from Bungie to Microsoft.

"The true accomplishment is the successful transition of development studios," Divnich said. "The results speak for themselves, Halo fans have welcomed 343 Industries with open arms and 343 Industries has cemented themselves as the right developer to continue the Halo franchise."

Whether or not the Halo series is the cultural landmark Microsoft claims it to be, the franchise will continue beyond Halo 4 as part of the Reclaimer Trilogy that will span (at least) Halo 5 and 6. Microsoft is no doubt hoping Master Chief has the endurance to continue.

Halo 4 is available today exclusively for Xbox 360. For more, check out GameSpot's review.

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