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Microsoft Halo aims to reignite video game market

Microsoft is hoping to reverse the recent slump in video games and kickstart the holiday shopping season as it launches the latest version of its blockbuster Halo video game.

Halo: Reach, the fourth in the popular series that pits the player against murderous aliens in a variety of settings, will be available from midnight in stores across the United States.

The game has sold more than 34 million copies in the nine years of its life, boosting the popularity of Microsoft's Xbox console.

The new Halo: Reach, technically a prequel to the main Halo narrative, has better graphics, more complex fighting scenarios and new ways of playing with others online, which analysts say could bring some excitement back to the slack video game business.

"If hardware sales react in a similar fashion to what was experienced when Halo 3 was launched in September 2007, September could be a huge sales month for Xbox 360 hardware," said Anita Frazier, an analyst at retail research firm NPD. "We can expect big numbers to be reported with September results."

U.S. retail sales of video game equipment and software fell 10 per cent last month, making it the worst August since 2006, according to NPD, as the industry continues a months-long slump in the shadow of the recession.

A record 2.7 million players already tried out a small part of the latest Halo in a beta test in May, which bodes well for sales, although Microsoft has not made any public projections.

A splashy launch event is planned for Times Square in New York. Electronics giant Best Buy is opening 400 of its stores just after midnight around the country for fans to buy the game.

The game itself is the story of a squad of soldiers (players) defending planet Reach from the Covenant, a band of fanatic aliens intent of destroying humanity.

The game can only be played on the Xbox, currently the best-selling game console ahead of Nintendo Co's Wii and Sony Corp's PS3.

The Halo series, published by Microsoft Game Studios, is a critical part of the company's foray into gaming, begun with the 2001 launch of the first Xbox.

Microsoft has sold more than 42 million Xbox consoles and has about 25 million users signed up for Xbox Live, where players can download games and compete against others online.

The Halo franchise has grossed nearly $2 billion in sales over its lifetime, Microsoft said. Its entertainment and devices unit, which also sells phone software, posted $8 billion in sales last fiscal year.

Halo: Reach is the last in the series made by Bungie, the game studio that created it. In April, Bungie said its next big game would be published by a unit of Activision Blizzard Inc, under a 10-year deal.

But Microsoft, which owns the rights to the franchise, plans to take the game in "exciting new directions," said Halo development director Frank O'Connor, in an interview. He gave no further dates or details on future installments.

Because Microsoft owns the rights to the game, "that makes the margins very attractive," said Dennis Durkin, chief operating officer of Microsoft's Interactive Entertainment Business.