'Halo 3' called on to combat Xbox 360 woes

SANTA MONICA, Calif. — Microsoft is counting on the biggest weapon in its video-game arsenal, Halo 3, to boost the Xbox 360's fortunes after the company's warranty problems.

At the company's event Tuesday on the eve of the E3 video game industry convention, Bungie Studios showed the first live footage from the second sequel in the best-selling sci-fi combat series.

Halo 3, which arrives in stores Sept. 25, will come in three flavors: a $60 standard edition; $70 for a limited edition with a bonus making-of disc and art book; and $130 for a limited "Legendary" edition that comes in a Spartan military helmet case.

The first two games in the Xbox-exclusive series have sold a total of nearly 15 million copies.

"If it wasn't for Halo, the Xbox wouldn't exist today," says Van Baker of information technology research firm Gartner. "It's going to make or break their fortunes this year on Xbox 360."

Microsoft also will bring to market a special green-and-gold-finished Halo 3 Xbox 360 system with matching wireless controller, headset and 20GB hard drive (available in September, no price set).

Microsoft also previewed two new popular-franchise entries with release dates sandwiching Halo 3's: Madden NFL 08 (EA Sports, Aug. 14) and Grand Theft Auto IV (Take Two Interactive, Oct. 16). Microsoft has a deal for exclusive GTA IV content to become available on the Xbox Live online service next spring.

"The only place you can play all three games is on Xbox 360," says Peter Moore, vice president of Microsoft's Interactive Entertainment Business.

BLOG:More on the happenings at E3.

The company hopes to see no downturn in hardware sales after last week's announcement it was extending Xbox 360 warranties from one to three years. The company made the move in response to a larger-than-expected number of units failing prematurely.

Early reports from retailers found no slowdown, Moore says. "I'm optimistic, quite frankly, that we have broken down any purchase barrier with consumer confidence to the Xbox 360 console by standing by it with the extended warranty," he says.

However, Baker says, Microsoft could reassure potential buyers with "a statement that we know what caused the problems."

Among other games for Xbox 360 due for the holiday season is a movie trivia game, Scene It? Lights, Camera, Action (no price set). It features HD movie clips and four new controllers "with a huge button in the middle," Moore says. "If you know the answer, you hit it."

Other E3 news:

•Electronic Arts will unveil early footage of games being developed with director Steven Spielberg. One is an action game, code-named LMNO (for Sony PlayStation 3, Xbox 360 and PCs); the other, PQRS (for Nintendo Wii), involves manipulating blocks a la Tetris. Spielberg got the Tetris-like idea after playing tennis on the Wii with Nintendo's Shigeru Miyamoto (creator of Mario, Zelda and Donkey Kong). "I am truly enjoying the creative collaboration, and we hope that gamers will be as excited as we are about what we can bring to the medium through our shared vision," Spielberg said in a statement.

•Guitar Hero III: Legends of Rock (for PS3, Xbox 360 and Wii, due this fall from Activision, no price set) will include an original track from Slash of Velvet Revolver, former guitarist for Guns N' Roses. Slash will appear as a character as well. His former band's song, Welcome to the Jungle, will be featured in the game, as will more than 20 unlockable Gibson guitar models.