It's the developer behind Age of Empires, one of the most successful videogame franchises of all time. It's a financial success, with its flagship franchise recording sales of over 20 million copies.

The company's latest title, Halo Wars, is a console RTS based on the hugely popular shooter series. By all accounts, this was a studio poised to conquer new territory with its dependable design and a popular property.

Which is why it was so confusing when owner Microsoft announced its intention to close Ensemble Studios following the completion of Halo Wars.

Recently I sat down to talk with Ensemble director of technology Dave Pottinger, who quickly echoed that confusion by saying Microsoft's decision "honestly doesn't make a lot of sense."

In our conversation, we touched on how the announcement of the studio closure affected the team, where the staff is moving on to, and what this means for the future of both Halo Wars and Age of Empires. Pottinger also shed a little more light on Ensemble's cancelled Halo MMO, while revealing that a reorganized Microsoft scrapped the title after it had already been green-lit. ... Read more

Sales of Microsoft's Xbox 360 dominated those of rival Sony's PlayStation 3 by a nearly two-to-one margin in October, according to new figures released by US sales tracker NPD.

The final numbers show the Xbox 360 with October sales of 371,000 units, compared to PlayStation 3 sales of 190,000. The Xbox 360 also lead the PlayStation 3 in the month of September, though by a smaller margin.

The news follows a September 7 price cut on the cheapest version of the Xbox 360 to $199, and comes just ahead of the November 19 launch of the New Xbox Experience, a set of updates to the console's interface and functionality.

Nintendo continued to top the console charts, with the Wii outselling the combined sales of both the PlayStation 3 and Xbox 360:

1. Wii - 803,000 units
2. Nintendo DS - 491,000 units
3. Xbox 360 - 371,000 units
4. PSP - 193,000 units
5. PlayStation 3 - 190,000 units
6. PlayStation 2 - 136,000 units

In all, the US video game industry brought in $1.31 billion during... Read more

Microsoft has announced that a $100 Xbox 360 60GB Xbox Live Starter Pack will hit retailers this November, packing a 60GB hard drive, Xbox 360 headset, ethernet cables, and three-month Xbox Live Gold subscription.

While Microsoft began packing the 60GB HDD with $300 Xbox 360 Pro models earlier this year, the larger-capacity drive had not been available to those that owned the previous Pro models, which were bundled with a 20GB hard drive.

Until now, the only option for more capacity has been the $140 120 GB hard drive, also bundled with the $400 Xbox 360 Elite model. For those that bought the Xbox 360 without a sizeable storage device, Microsoft is offering free memory cards and a discount on the 20GB hard drive.

"This is the perfect upgrade path for those looking to enjoy all that the New Xbox Experience has to offer including streaming movies and TV episodes offered by Netflix, Avatar creation, Xbox Live Parties and much more," wrote Microsoft.

Microsoft today filed its first quarter earnings, reporting record first quarter revenue on strong sales of the Xbox 360.

The company pulled in a total of $15 billion in revenue over the quarter, resulting in a net income of $4.3 billion. The entertainment division contributed profits $178 million, an increase over the $167 million of profit over the same quarter last year.

"We sold 2.2 million Xbox 360 consoles, representing over 20% growth," said Microsoft senior VP Chris Liddell of the quarter, which covered the three months prior to September 30.

"Xbox 360 outsold PS3 by over 100,000 consoles over the quarter," he added, mentioning that the Xbox 360 attach rate--the average number of games purchased by each 360 owner--has now hit 8.1, an industry high.

Meanwhile, Microsoft rival Sony saw its profit over the same quarter drop by half over last year, to $754 million. A report earlier today noted that Sony's gaming division is still operating at a loss, with the company lowering expectations for its 2008 net profits by 38%.

Gamers may soon be a little shielded from voice chat stupidity on Xbox Live, as Microsoft has been granted a patent for real-time censoring in voice communications.

Microsoft applied for a patent on an "automatic censoring filter" in 2004, according to Ars Technica. In the technology, speech-recognition software scans what's being said in real-time and distorts the audio stream if it becomes probable that obscene language is about to be used.

The gaming corner of the internet is quick to speculate that the technology will come to the profanity-laden Xbox Live, but an application in greater demand of the trick is television. Once brought to market, the technology is expected to be sold to television networks, who could rest easy knowing they're automatically avoiding fines by the FCC for airing indecent content.

Ars speculates that what satiates an easily offended American television audience could also be used by governments easily offended by politically-motivated speech.

In short, stopping 12-year-olds from screaming racial epithets during Halo 3 matches is the tip of the iceberg--and probably not the main reason--for Microsoft's patent. The science behind the tech, reproduced from the patent application, follows... Read more

Microsoft VP John Schappert added to the continued discussion of the zombie-like Metal Gear Solid 4 on Xbox 360 rumor, stating that Solid Snake's elderly romp would be welcome--and technically feasible--on his company's console.

"I can't speak on behalf of Konami, but I can shed more light on the fact that we definitely have the power to run MGS4," Schappert said to MCV, adding his two cents to debate centering on whether the system is capable of running Kojima Productions' hardware-intensive PlayStation 3 exclusive.

"We've got an amazing amount of horsepower and graphics power," Schappert continued, citing a number of Xbox 360 exclusives running "in true high-def."

The executive's words about Sony were less critical than previous Microsoft statements, perhaps because Microsoft declared a second-place victory over the PlayStation 3 in the console wars last month.

"I'm certainly in the fan club that would love to see Kojima-san's masterpiece come our way," he concluded.

Not content with the recent Xbox 360 price cuts, Microsoft has announced a series of holiday bundles that feature some free games.

The Arcade unit will pack Sega Superstars Tennis along with its previous 5 free Xbox Live Arcade games, while the Pro and Elite models sport LEGO Indiana Jones and Kung Fu Panda.

Pricing and model details are as follows:

Xbox 360 Arcade ($199 - No Hard Drive)
• Sega Superstars Tennis (Sumo Digital)
• Xbox Live Arcade Game Disc:
  • Boom Boom Rocket (Bizarre Creations)
  • Feeding Frenzy (Sprout Games)
  • Luxor 2 (MumboJumbo)
  • Pac-Man Championship Edition (Namco Bandai)
  • Uno (Carbonated Games)

Xbox 360 Pro ($299 - 60GB) / Xbox 360 Elite ($399 - 120GB)
• Kung Fu Panda (Luxoflux)
• LEGO Indiana Jones (Traveller's Tales)

Rumors of a Blu-ray add-on for the Xbox 360 are once again swirling, and Microsoft has once again denied that it has any plans to release such a device.

"As we've said before, Microsoft has no plans to introduce an Xbox 360 Blu-ray add-on," Microsoft told Edge. "Games are what drive consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available."

At the least, this is the fifth time Microsoft has denied the persistent rumors that the Xbox 360 will receive an upgrade to enable Blu-ray movie playback. Instead, the company is focused on the online distribution of movies and television shows via Xbox Live, which will gain support for Netflix's streaming video on November 19.

Microsoft is taking steps away from the direction of removing under-performing games from Xbox Live Arcade, according to a new interview from the Tokyo Game Show.

Microsoft VP John Schappert told IGN that "the information about XBLA de-listing had been taken out of context and that there was no plan to do any such thing." Microsoft had only put in place "parameters by which we can delist" games but is not moving forward with any plans to start removing games from the downloadable marketplace.

The New Xbox Experience: Saving Mediocre Games From De-Listing

Schappert's statements deny those of Xbox Live general manager Marc Whitten, who claimed in May that Microsoft would enact a new policy of delisting underperforming titles which had been out for six months, scored less than 65% on Metacritic, and had a conversion rate of less than 6%.

To boot, Schappert indicated that the New Xbox Experience, the Xbox 360 dashboard overhaul due in November, would improve sorting options and make de-listing unnecessary.

Though Microsoft has repeatedly denied any plans to bring the Blu-ray format to Xbox 360, another rumor has popped up claiming that such a device is now in production.

According to X-bit labs, Toshiba-Samsung Storage Corporation has been contracted to make an $100-$150 external add-on that will allow Xbox 360s to play Blu-ray movies, similar to the existing and now-discontinued Xbox 360 HD DVD player.

The site also claims that Microsoft has "always said" that it might release a Blu-ray add-on if there was demand, a statement that is definitely false.

"I can categorically say that we're not working on a Blu-ray player for Xbox 360," Microsoft VP Shane Kim declared earlier this year, adding to an already impressive list of denials. "To my knowledge, we don't have any intent to do that."

In lieu of Blu-ray support, which many believe to be the PlayStation 3's main advantage, Microsoft has trumpeted the Xbox 360's digital distribution of movies and TV shows, which will soon include Netflix streaming video.

Microsoft today confirmed the recent rumors that former Metal Gear Solid 4 producer Ryan Payton and ex-id art director Kenneth Scott have joined Microsoft Game Studios, which the comapny says is "working on upcoming and existing Halo games."

The two join what MGS head Phil Spencer described to Edge as a "group of industry heavy hitters," which includes Scott's wife and ex-Gearbox technician Corrinne Yu along with former Bungie writer Frank O'Connor.

Microsoft is said to have at least four different teams working on projects related to the immensely popular sci-fi series, with rumors indicating that Brothers in Arms developer Gearbox is heading up Halo 4 for Xbox 720.

Series creator Bungie is working on a new campaign for Halo 3, while the soon-to-be-closed Ensemble Studios is wrapping up its strategy game Halo Wars and Microsoft Game Studios prepares the Peter Jackson-helmed episodic Halo game.

Shacknews had previously heard from a reliable source that Payton was hired as the creative director for the Peter Jackson Halo game, often referred to as Halo: Chronicles, though Microsoft has yet to confirm his exact position.

Video game-related stocks have long been seen as a safe haven for investors, but even Blizzard was feeling the crunch today after the record-breaking 777 point drop on the Dow Jones industrial average.

The tech-based NASDAQ index saw a similar slide, dropping 199 points after the US House of Representatives voted down a bill to rescue the financial sector with $700 billion of taxpayer money.

The US gaming industry saw widespread drops, with Activision Blizzard and Electronic Arts both seeing major hits. A mess of ugly numbers provided by GameSpot:

The share price of Activision Blizzard (World of Warcraft, Guitar Hero World Tour), the newly minted biggest third-party publisher on the planet, slid 13.8 percent ($2.26) to end the day at $14.12. Former top dog Electronic Arts (Madden NFL 09) saw $3.63 shaved off of its stock price, ending the day down 9.16 percent at $36 even.

THQ (Saints Row 2) lost 7 percent, or $0.87, to close at $11.48, and shares in Take-Two Interactive (Grand Theft Auto IV) lost 4.52 percent ($0.73) to close at $15.43--nearly $10 less than its asking price one month ago.

GameSpot further notes that overseas publishers and console manufacturers were not immune from the turmoil, with Microsoft, Sony, and Eidos parent SCi Entertainment all posting significant losses. Publisher Ubisoft dropped a massive $17.92 per share to close at $65.37.

Phil Spencer, head of Microsoft Game Studios, wants to allay fears surrounding the fates of subsidiary studios Rare and Lionhead after the publisher closed Ensemble Studios, Shadowrun developer FASA, and UNO maker Carbonated Games.

Speaking to GamesIndustry, Spencer remarked that "the work that those studios are doing [is] incredibly important to [Microsoft]." He offered additional praise for Rare, perhaps in response to recent criticism of the studio. "What studio on the planet signs up for two launch games? That's just crazy," he commented.

As for Lionhead, its Xbox 360 exclusive Fable 2 just went gold, potentially leaving the studio's future in the air. "The next Lionhead game is definitely [a Microsoft Game Studios] game," Spencer promised.

Microsoft's five-week Summer of Arcade promotion saw sales of downloadable Xbox 360 games hit new some new records, the company announced today.

Encompassing the releases of Braid, Castle Crashers, Geometry Wars: Retro Evolved 2, Bionic Commando Rearmed and Galaga Legions, the Summer of Arcade saw a 58% jump in unique members buying games. Furthermore, August revenue of Xbox Live Arcade games broke the previous record by 67%.

"The debut of the new strategy proved to be a huge success," noted Xbox Live manager Marc Whitten, "but the focus on quality games doesn’t stop with the Summer of Arcade. We have plenty more great titles coming out in the next few months and beyond that we think will continue to fuel this incredible momentum."

Last week, former Xbox executive Peter Moore fired some strong criticism at Microsoft subsidiary Rare and its Xbox 360 launch titles Kameo and Perfect Dark Zero.

"I think the industry had passed Rare by," said Moore, who later retracted the statement. "It's a strong statement, but what they were good at, new consumers didn't care about anymore.. their skillsets were from a different time and a different place and were not applicable in today's market."

Yesterday I had a chance to speak with Rare creative director Gregg Mayles, a company veteran who served as lead designer on the original Donkey Kong Country.

I queried Mayles' for a reaction to Moore's comments, as well as whether he feels nervous following the shutdown of fellow Microsoft-owned developer Ensemble Studios (Age of Empires, Halo Wars).

Shack: I wonder if you saw Peter Moore's recent comments?

Gregg Mayles: Yes, I did.

Shack: What was your reaction to that?

Gregg Mayles: Amusement, really. I personally don't tend... Read more

Thanks to a recent interview, EA Sports head man Peter Moore may have acquired a bit of a reputation for killing systems with his previous employers. But in the case of the Xbox 360, some have thought the Red Ring of Death killed Moore. Not so, says he. His departure from Microsoft at the height of the Red Ring controversy was pre-planned.

The real reason for Moore's departure was an offer he couldn't refuse: to join Electronic Arts under new CEO John Riccitiello as head of the newly-reorganized EA Sports label. "My combination of sports experience ... and linking the two--videogames and sports--together was an obvious attraction for me; as was getting back to the Bay area which I love," he explained in a continuation of his interview with The Guardian.

"It was unfortunate because as this was going on the Red Ring of Death story broke and so for better or worse the belief was that I'd been pushed... Read more

Microsoft "prematurely left the original Xbox" due to the costs of the hard disc drive included in every unit, former Xbox executive Peter Moore has revealed.

"The hard drive in every Xbox killed us," Moore, now the president of EA Sports, told Guardian. "We were still selling it at $199 and the hard drive was like $70. That's why we prematurely left the original Xbox, because the more we were selling--there was still great demand--it was killing us, and there was no way to bring the price down."

The original Xbox, which debuted in 2001, was replaced only four years after launch when the Xbox 360 arrived in 2005. Xbox 360 units can be bought with or without hard drives, and owners are able to buy larger hard drives from Microsoft, something that wasn't feasible with the original Xbox as the HDD was internal.

"We determined at around the 25 million unit mark that we just needed to slow this thing down and just not sell any more, and move to the 360 as quickly as we possibly could," Moore explained.

Shacknews can corroborate word that former Metal Gear Solid 4 producer and one-time games journalist Ryan Payton will be serving as creative director on the new Halo project in development by Microsoft Game Studios and Peter Jackson.

Reports of Payton's new role surfaced on Kotaku as a rumor and "very reliable news," with Shacknews having heard the exact same information from its own reliable source.

Payton marks the latest addition to Microsoft's growing internal Halo team, which now includes former Gearbox technician Corrinne Yu and ex-Bungie writer Frank O'Connor, and is presently seeking more staff.

Often referred to as Halo: Chronicles, the Xbox 360 game from Lord of the Rings film director Peter Jackson was first announced in 2006, though few details have emerged since that time.

Microsoft may be looking to fill positions at its new Halo Studio to work on the Xbox 720, according to a job posting from the software and hardware giant as discovered by GameGuru.

"As part of a next generation team, you'll be instrumental in helping to lead the development of the engine that will power future experiences for the next generation of gaming platforms," reads the vacancy, which invites applications for a Program Manager at Microsoft's Redmond headquarters. The phrase "next generation of gaming platforms" likely refers to a future console to succeed the Xbox 360 alongside future developments on PC.

"You will have the opportunity to collaborate with... Read more

Xbox 360 hardware sales in North America have doubled, and in some instances sextupled, since last week's price cut, according to a statement from maker Microsoft.

"Coming off the heels of the console price drop last week, Microsoft Xbox 360 sales have surged, with retailers reporting over 100% sales lift for all Xbox 360 models compared to the previous weekend," reads the Microsoft release received by Kotaku.

"Additionally, retailers are reporting that between Friday, Sept. 5 and Sunday, Sept. 7, some Xbox 360 models were selling at six times the rate they were the weekend prior," the company continued.

Taking effect last Friday, September 5, the price cut saw the following $50-80 price drops across the three Xbox 360 models:

• Xbox 360 Arcade (No Hard Drive): $199, down from $279
• Xbox 360 Pro (60GB HDD): $299, down from $350
• Xbox 360 Elite (120GB HDD): $399, down from $449