Video Games

It's hard to believe that any developer making a game based on Halo could be shut down for financial reasons, but that's the fate awaiting Dallas-based Ensemble Studios.

Microsoft, which owns Ensemble, recently told the successful, well-regarded maker of strategy games that it will be shuttered after its newest game, Halo Wars, is finished in a few months.

Bruce Shelley, a high-profile designer at Ensemble, said on his official blog that when Microsoft delivered the bad news earlier this month, "Everyone at our studio was shocked."

Until now, Microsoft has declined to elaborate much on its decision, but I got an e-mail interview this week with Bonnie Ross, general manager of the Halo business at Microsoft.

She didn't directly answer all the questions – the closure was "rooted in an evaluation of the larger strategy and direction of [Microsoft Game Studios] and Ensemble," whatever that means – but there are some new revelations (full transcript of the interview is at our game blog, punchbutton.com).

For example, Ensemble, which is based near downtown Dallas, had been planning to relocate to Plano.

So one reason Microsoft announced the closure before Halo Wars was completed was that the 102 Ensemble employees were starting to look for new houses, schools, etc. Microsoft didn't want to put those workers through all that hassle just to lay them off a few months later.

Does the closure of Ensemble represent a shift in Microsoft's focus toward console games, and away from PC games? Halo Wars is coming for the Xbox 360, but otherwise Ensemble has been mostly a PC game-maker.

"I can assure you the Windows platform remains a large focus for Microsoft, despite our growth in console development," Ms. Ross said. "In terms of revenue, Windows is far and away the largest gaming platform in the world, so it's an incredibly important part of Microsoft's gaming business."

One Windows game that Ensemble was reportedly working on at one point was a Halo-based massively multiplayer role-playing game, sort of like World of Warcraft in space. That title was canned a year or two ago, though.

Ms. Ross said that cancellation did not factor into the decision to close Ensemble.

Ms. Ross said shifting development of Halo Wars to another studio was never considered, and Microsoft is confident that Ensemble will turn in a top-notch product before turning off the lights.

Some employees have already said they plan to form a new studio that will be closely aligned with Microsoft and handle post-release support for Halo Wars.

At the end of the day, this is still something of a baffling decision.

Ensemble recently noted that its flagship Age of Empires franchise has sold 20 million copies since the company was formed in 1997 (Olympic swimmer Michael Phelps is apparently a big fan).

That's hundreds of millions of dollars in revenue and, even in this day and age of $700 billion financial bailouts, that's real money.

So, for now, let's just toast the fine developers at Ensemble, wish them well, and hope Halo Wars kicks butt.