Within weeks of the Xbox launching in 2001, Halo became synonymous with the console, showing what it could do in comparison to PS2, and system selling the Xbox single-handedly. Not since the N64's GoldenEye had a first person shooter been so expertly executed on a console, and the critical and commercial success that followed only proved this. In the aftermath, the Halo team - refreshed, respected, ready to take things to the next level - moved on to what they thought would be an exciting, brand new project. But it didn't work out.
Microsoft, unsurprisingly, wanted Bungie to move straight on to Halo 2, and used their weight and investment in the company, to shift the team away from the project they were working on to a Master Chief sequel. Seropian, one of the original founding members of the company in 1990, disagreed, disillusioned with the 'crunch' factor now being applied time-wise, and left to set up Wideload, who went on to make the solid and fun Halo-esque caper Stubbs The Zombie.
The remaining members of the team, meanwhile, began to up the ante: they were finally able to implement network play; they put in 14,000 lines of combat dialogue compared to 2000 in Halo; they included two hours of cinematic scripting; the list of improvements went on. Against this backdrop, however, was a battle between the top brass at MS over when to release it. On one side, were those who wanted it out in early 2004; and the other camp, those who believed Bungie were artists and should be allowed to finish the game on their own schedule. The 'ready when it's ready' camp eventually won out. With Xbox 360 already on the horizon, any delays on Halo 2 would have a knock-on effect to the sequel that MS hoped would be a launch title for 360. As a result, the storyline was chopped in half to leave a huge - and some would say, disappointing - cliffhanger, but made development more manageable, and the game was scheduled for the end of 2004.
On its release, Halo 2 sold 2.4 million copies and took $125 million in its first 24 hours, making it the highest grossing release in gaming history. Its late release privately disappointed Microsoft's moneymen, which meant that Halo 3 could not make Xbox 360's launch. However, Bungie were now able to make Halo 3 without going into permanent 'crunch'; free to create the game they wanted. E3 showed they were right.
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