fter much whispering behind the scenes since Halo 3 launched last week, Microsoft has officially announced that Bungie is embarking "on a path to become an independent company", while the publishing giant will retain an equity interest in the developer.

However, the pair aren’t severing ties completely and the two will continue the long-standing publishing agreement between Microsoft Game Studios and Bungie for the Halo IP, as well as other future products by Bungie.

"Our collaboration with Bungie has resulted in Halo becoming an enduring mainstream hit," said Shane Kim, corporate vice president of Microsoft Game Studios. "While we are supporting Bungie’s desire to return to its independent roots, we will continue to invest in our Halo entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the Halo universe. We look forward to great success with Bungie as our long-term relationship continues to evolve through Halo-related titles and new IP created by Bungie."

"This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organisationally in our mission to create world-class games," said Harold Ryan, studio head for Bungie. "We will continue to develop with our primary focus on Microsoft platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios; and we look forward to continuing that affiliation through Halo and beyond."