Byline: Cynthia L. Webb

Microsoft is taking cues from Hollywood as it prepares for tomorrow's release of " Halo 2 ," the much-anticipated sequel that the software giant hopes will fuel Xbox gaming device sales and cement its footing in the video game industry.

The Redmond, Wash.-based software company is planning a glitzy marketing blitz and a red carpet-style treatment that could render the movie studios green with envy, the latest signs that Microsoft wants to crown itself king of the digital entertainment realm. And in an indication that this games is a hot property, bootlegged copies already are selling on eBay .

How big an event is this supposed to be? "It's huge," Michael Chu , a supervisor at the Software Etc. store in New York, told the New York Post. "People have been waiting for this for three years. We had people reserve this as early as 2001."

"The anticipated release of Halo 2, the sequel to Microsoft's best-selling 2000 game, is the latest and perhaps the best indication of how the blockbuster mentality of Hollywood has pervaded the video game industry. As development budgets for the most advanced games approach $20 million, the stakes for producers have risen accordingly. According to Microsoft, the marketing budget for Halo 2 is 'tens of millions of dollars,' perhaps more than the cost of developing the game itself (which the company will not divulge," the New York Times reported. "And just as a splashy Hollywood premiere attracts attention for a film, a video game's first-week sales can be critical to winning shelf space and retailer support. More than 1.5 million people preordered a $50 copy of Halo 2; if all of them pick it up the first few days, the game's opening gross will be $75 million, almost $5 million more than the animated film 'The Incredibles' did this weekend."

"For the first 24 hours, Halo 2 will blow past anything Hollywood has put out there," Peter Moore , a marketing vice president for Microsoft's Xbox unit told the paper. "I'm eager for the comparison." * New York Post: Xboxers Can't Wait to Say Hello, 'Halo' * The New York Times: Microsoft Seeks Video Game Winner With Halo 2 (Registration required)

"Why the Hollywood-sized publicity blitz for a video game? Halo 2, an immersive science-fiction combat game, is a linchpin in Microsoft's ambitious $2 billion bet that it can lure a mainstream audience to the video-game-playing habit," USA Today wrote. "Microsoft's gamble is a calculated one. Global video game hardware and software sales top $10 billion annually -- surpassing what U.S. consumers spend on movie tickets. Yet it remains largely the province of kids and young men. Since muscling its way into the business with the introduction of the Xbox in late 2001, Microsoft has sold 18 million gaming consoles. Sony 's PlayStation 2 dominates with 75 million sold, while Nintendo has moved 16 million GameCubes , according to Arcadia Investment . Getting Xboxes into pervasive use was just step one in Microsoft's plan to redefine the video game market. In November 2002, it introduced Xbox Live, an elaborate online gaming service -- and the real engine behind its drive to weave video games deeper into the cultural fabric." * USA Today: Xbox Uses Halo 2 To Herd Players Online

The game, which goes on sale at 12:01 a.m. on Tuesday "requires a $50-a-year subscription to Microsoft's interactive Xbox Live platform, in addition to the game system itself, a home Internet connection and a state-of-the-art TV," the NY Post explained. More from USA Today: "Xbox Live isn't growing fast enough to draw 10 million subscribers by 2007, as Microsoft had hoped. 'Reaching critical mass will take time,' says Jay Horwitz , Jupiter Research lead analyst. That's where Halo 2 enters the picture. Microsoft has been scrambling all year to build buzz. It wants to assure a blockbuster -- one that tilts mainstream attention toward Xbox Live. Halo 2 trailers have run for months in movie theaters, as have Internet promotions. A TV ad campaign will kick into gear for the holiday season. And Microsoft has been throwing lavish Hollywood Xbox parties. Celebrities like actress Aisha Tyler and rock band Incubus have received free Xboxes, HDTVs and test copies of Halo 2 from the software giant."

Some gamers just can't wait for the official release, much to Microsoft's chagrin. "Advance copies of the aliens-versus-space marines video game Halo 2 have already fetched as much as $265 on Internet auction site eBay, days before the official launch," the AP reported. More mischief, from a Seattle Times roundup: "The much-awaited game for the Microsoft Xbox is hitting the market tomorrow, but a few Midwest retailers apparently began selling the game last week, including a store in Toledo, Ohio, according to reports on enthusiast Web sites Gamespot and Gaming Age," the paper said.

"In a statement, Microsoft would only say it has been 'working really hard to keep the Halo 2 plot twists a secret so everyone can have an equal opportunity to enjoy them. That will happen when the game officially goes on sale at 12:01 a.m. on Tuesday,'" the AP reported. * Associated Press via the Houston Chronicle: Xbox Action Game 'Halo 2' Sells Early On eBay * The Seattle Times: Early Jump On 'Halo 2'

The legitimate sales will be part of Microsoft's battle to win more converts to the Xbox, as the Daily Telegraph reported: "Let the battle of Christmas begin. It's the first of the festive season duels and it's one of high stakes and even higher interest. The two major videogame consoles, Sony's Playstation 2 (PS2) and Microsoft's Xbox, are involved in a multi-million dollar pre-Christmas contest for supremacy over each other -- and over the cinema. At stake is control of the $800 million industry. This year the stakes have been raised by the industry's adaption of cinema's late-year release of blockbuster titles. 'It's a huge business and it continues to amaze me that it's not recognised as such,' Microsoft home entertainment regional director David McLean said."

And the Seattle Post-Intelligencer reported on the same competitive barriers, writing that "for all the momentum achieved by the 'Halo' franchise, there's no shortage of competition going into the holiday season. At the top of the list is ' Grand Theft Auto: San Andreas .' The latest installment in the best-selling series is exclusive to Sony's PlayStation 2. Games for the PlayStation 2 have an inherent advantage in the battle for retail sales because of the Sony console's sizable lead in worldwide market share. Michael Pachter , an analyst with Wedbush Morgan Securities , said he expects the latest 'Grand Theft Auto' to outsell 'Halo 2' during the holidays as a result." * The Daily Telegraph via Australia's News Interactive: Game For A Festive Fight * Seattle Post-Intelligencer: Xbox Builds On 'Halo' Effect

Halo Party

Some early reviews have already given "Halo 2" an enthusiastic thumbs up, though the real proving ground will be whether teens and tweens flock to it. One example you won't find in any other newspaper today is my friend who has planned a "Halo 2" release party at her house tomorrow for her 16-year-old son and his friends. It's audiences like this where "Halo 2" will sink or swim.

"Microsoft has reported pre-order sales of more than 1.5 million copies of 'Halo 2,' a figure that leaves the company predicting its game will out-gross the single-day earning records of any Hollywood release. And if early enthusiasm is any guide, the sequel should easily surpass the original's sales of more than 5 million units," the Denver Post reported. "This game will blow away anything that's on the market or has been on the market,' said Buy Back Games store manager Gilbert Fransua . Like an estimated 6,500 other retail outlets across the country, Fransua's Wheat Ridge store will reopen its doors Monday night at the stroke of midnight to dish out copies of the game to eager fans. To understand why anyone would stand outside at midnight in the cold or play hooky for the chance to enjoy a video game, you have to look back to the 2001 release of the original 'Halo.' 'The first Halo game defined the Xbox platform,' said Dan 'Shoe' Hsu , editor in chief of Electronic Gaming Monthly. 'For the longest time, it was the best, and many would say the only, reason to buy Microsoft's console. The original game is still consistently a top-10 seller today, which means there are a heck of a lot of people eagerly anticipating the sequel.'" * The Denver Post: Preparing For The Invasion

Here's some glowing praise from BBC News: "Three years on, with expectations at fever pitch, the pressure is on game developers Bungie to deliver a masterpiece. Fortunately Halo 2 largely lives up to the hype. Bungie have taken all that was great about the original and gone one better, to produce a polished and accomplished first-person shooter. The first thing that hits you is the look of the game, with a Halo universe full of detail, with crisp and sharp alien environments. At times, though, the design of these worlds is indistinctive and confusing, leaving aplayer wondering which is the way ahead. Picking up the game is like getting reacquainted with an old friend. The controls are as intuitive as ever, but they are now much more responsive." * BBC News Online: Halo Sequel Delivers On the Hype * The Seattle Times: 'Halo 2': Spartans Go To War Again

The Seattle Times reported that creating the sequel has been a labor of love and long hours. "While the rest of the Puget Sound area relished a gorgeous summer, Microsoft's Bungie Studios team spent nearly every waking hour putting the finishing touches on the video game 'Halo 2,'" the paper said (Microsoft bought the gaming firm Bungie Studios in 2000). "The job was so grueling -- at one point the studio worked 48 hours straight -- that Microsoft rewarded the group by bringing in chef Shiro Kashiba from the Belltown sushi restaurant Shiro's to prepare an extravagant meal. Tomorrow, the team will get to see if the work was worth it. Microsoft's Xbox division has waited three years for its first bona-fide phenomenon, and it likely has one now in 'Halo 2,' the sequel to the sleeper hit that became the most popular title in the Xbox console's short history."

The San Jose Mercury News has an explainer on some of the sequel's perks. "The new game would allow players to do things like wield two guns where in the original version they only had one. Or players could jump into a moving vehicle and wrestle control away from an opponent in mid-flight. This was the kind of innovation in play style that hard-core Halo fans would embrace, the team decided. The team grew to nearly 70 people. They spent their time fleshing out the game, which has more than two hours of cinematic animations. Among the changes: 'Halo 2' boasts more than 14,000 lines of dialogue among combatants, compared to just 2,000 in the original game." * The Seattle Times: 'Halo 2' Ready For Blastoff * San Jose Mercury News: Creating Sequel A Thriller (Registration required) (Registration required)

An "Incredible' Box Office Debut

The Pixar-Disney release of the computer animated film about the superhero family " The Incredibles ," lived up to its pre-release hype at the box office, raking in $70.7 million in its opening weekend. "If numbers hold when final figures are released today, 'The Incredibles' would have the second-best opening weekend among animated flicks, coming in just ahead of Pixar's 2003 blockbuster, 'Finding Nemo,' which debuted with $70.3 million. 'Shrek 2' holds the animated debut record with $108 million," the Boston Herald reported. The New York Daily News said: "'The Incredibles,' the sixth collaboration between Disney and Pixar Animation Studios, got near-unanimous rave reviews and drew an audience ranging from kids to grandparents. The film took in nearly $30 million on Saturday alone - the highest one-day total ever for Disney." * Boston Herald: An 'Incredibles' Debut Has Pixar Flying High * New York Daily News: Incredible Box-Office Take For 'Incredibles'

Yahoo Takes Notes From Hollywood Too

Microsoft isn't the only tech company with Hollywood on its mind. Enter Yahoo , which is in a fierce search-engine war with Google and Microsoft. The company is poised to partner with Hollywood to create its own content to draw people to its site, the Los Angeles Times and the San Francisco Chronicle reported. While Yahoo is mum on its plans, the LA Times reported, "People familiar with the discussions say Yahoo is pressing entertainment-industry producers and talent agents to start pitching new shows and short films that the Internet giant could license for broadcast online. No longer satisfied to simply repackage film trailers and TV clips, some Yahoo executives believe the surge in broadband connections means the Internet may finally be ready to operate more like a television network, these people said. Since taking the reins in 2001, Yahoo Chief Executive Terry Semel has compared the company to an early-day cable network. HBO , for example, started in 1972 by showing movies months after they left the big screen, but it's now best known for home-grown shows such as 'The Sopranos.'" * Los Angeles Times: Yahoo Seeking Its Own Content (Registration required)

This report comes on the heels of news that Hollywood star power is coming to the search engine firm (much like Semel himself, who came from Warner Bros .) "Is Yahoo going Hollywood? It's a question that analysts are increasingly asking after the Sunnyvale Web portal's hiring last week of Lloyd Braun , a former chairman of ABC television. He is charged with overseeing Yahoo's entertainment and media properties, including movies, music, gaming, sports, news and finance. The thinking is that by recruiting Braun, Yahoo is signaling bigger media aspirations. Namely, the company is setting itself up for a day of digital convergence in which consumers watch films and listen to the latest rock bands online as much as on television sets and stereos," the Chronicle reported. * San Francisco Chronicle: Yahoo Looking At New Arena

Creative Downloads: Is Lessig More?

Wired magazine is releasing a CD in its November issue that adheres to the radically different notion of copyright law espoused by the nonprofit Creative Commons project, led by Stanford law professor Lawrence Lessig . The CD is a compilation of songs by artists such as former Talking Heads frontman David Byrne and the Beastie Boys .

The San Jose Mercury News reported that the CD "invites listeners to 'Rip. Sample. Mash. Share.' That's the kind of musical experimentation that could get you slapped with a lawsuit. But have no fear of hearing the heavy tread of Bruno Magli -wearing entertainment attorneys at your door," the newspaper said. "The artists on the disc have agreed to give music lovers the freedom to transfer the songs to their computers, distribute them over Internet file-swapping networks like Kazaa , and even sample the rhythms and hooks to create their own compositions. The only thing you can't do is use them in commercials or, in a handful of instances, a song you plan to release. It's the boldest experiment yet in trying to catalyze support for copyrights compatible with the digital reality of the 21st century. 'The Wired CD' is attracting notice, in part, because the magazine won support from some of the best-known names in contemporary music."

Lessig in an e-mail interview with the Merc, wrote: "The hardest step is the first. This CD will demonstrate and encourage. It will show many the potential that a more flexible approach to copyright offers. We are hopeful it will encourage others to do the same. And we are especially eager to see some of the creative work that comes from these remix rights." * San Jose Mercury News: Rip. Sample. Mash. Share (Registration required)

Reuters has a recent article on how the Wired CD is one example of how BitTorrent technology, used by some to swap copyrighted files, can be used for legitimate swaps too. BitTorrent is the latest swapping technology making the recording and movie industry squirm. "BitTorrent, which is available for free on http://bittorrent.com, can be used to distribute legitimate content and to enable copyright infringement on a massive scale. The key is to understand how the software works. Let's say you want to download a copy of this week's episode of 'Desperate Housewives.' Rather than downloading the actual digital file that contains the show, instead you would download a small file called a 'torrent' onto your computer. When you open that file on your computer, BitTorrent searches for other users that have downloaded the same 'torrent.' BitTorrent's 'file-swarming' software breaks the original digital file into fragments, then those fragments are shared between all of the users that have downloaded the 'torrent.' Then the software stitches together those fragments into a single file that a users can view on their PC."

In other copyright news, the New York Times ran an interesting article on some snags with Project Gutenberg , an effort to put complete texts of books online for free access. The project "may be the latest victim in the Internet battle over copyright. Earlier this year, the Australian affiliate of Project Gutenberg posted the 1936 novel 'Gone With the Wind' on its Web site for downloading at no charge. Last week, after an e-mail message was sent to the site by the law firm representing the estate of the book's author, Margaret Mitchell , the hyperlink to the text turned into a 'Page Not Found' dead end. At issue is the date when 'Gone With the Wind' enters the public domain. In the United States, under an extension of copyright law, 'Gone With the Wind' will not enter the public domain until 2031, 95 years after its original publication. But in Australia, as in a handful of other places, the book was free of copyright restrictions in 1999, 50 years after Mitchell's death. The case is one more example of the Internet's inherent lack of respect for national borders or, from another view, the world's lack of reckoning for the international nature of the Internet, and it is also an example of the already complicated range of copyright laws," the Times reported. * The New York Times: One Internet, Many Copyright Laws (Registration required)

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