Rumor has it that Bungie is leaving Microsoft. The full email from someone who apparently is in the know and whose NDA recently expired:

"So heres my big secret. You should google Bungie + Microsoft + separation this week. You know that big ol BILLION dollar franchise Bungie has created for Microsoft, to show their appreciate Microsoft is letting Bungie leave. Of course Microsoft gets to keep all rights to the Halo franchise, but as today Bungie no longer part of Microsoft. Ask anyone who works there to search the global address book, they're no longer in there. Microsoft was supposed to release the press release today but if they wait till the 10/6 the impact wont effect the quarterly results. However today is the actual official date and the day the NDAs expire, however you still didn't hear this from me." "Apparently MS just wants Bungie to make Halo for the rest of their natural days, and Bungie doesn't like how MS is constantly trying to "handle" everything they do; the way they market their games, the way they interact with their fans (basically the fact that they do appreciate their fans), and how stingie they are with the profits (comparable to the rest of the industry). So as of today they are their own independent entity. They'll probably make Halo 4 for Microsoft, however hey are also free to create new intellectual properties for whatever system they want. (Even though they prefer the xbox platform)"

I don't know if I should believe this. I can see two ways for Bungie to leave Microsoft: they come to an amicable agreement with their parent company, or everyone packs up and leaves. Let's look at each option:

Amicable agreement
Microsoft making an amicable agreement with Bungie to let them go? Highly unlikely. IP is valuable, but I would argue that in the games industry, the capability to execute and exploit an IP is more valuable. Nobody can make a Halo game like Bungie. Look at Take2 and the Max Payne license: they have the IP, but what are they doing with it? Was that worth the $45 million? For Microsoft to let Bungie go would be an awfully nice move, and Microsoft is not known for playing nice, especially when something as crucial as the Halo license is involved.

Everyone packs up and leaves
Sounds like you could do it, right? Well, there's a couple of snags:

• Employment contracts. The higher the position, the longer your notice period and the longer it takes before you can actually leave and start something new. It gets even more fun with no-compete clauses. Remember Ubisoft Montreal? The higher people are in Bungie, the more they would be driving this transition, and the harder it would be for them to actually pull it off.
• Company size. How big is Bungie? Probably about 150 people. To get all of those people to quit and re-apply at another company right after a major crunch phase is very, very hard. It's much more likely that only a number of key people would leave. Even then, those people have to make a choice between staying with the status quo at Microsoft and maybe getting a promotion because the guy above them left, or going off to start something new. Admittedly, they could start again under potentially great conditions - the Halo team would have people beating down their doors with suitcases full of money. But how many people at Bungie remember what it is like to start a new company?
• Operations. Halo 3 was just released. Who handles the operations of the Bungie.net website? Because there's a ton of stuff going on there. Who makes downloadable content or patches? Who makes the PC and Mac ports? The rumor sorta kinda covers this by claiming Bungie agreed to do Halo 4, but again, that only works if this really is an amicable arrangement.

What makes the rumor sound somewhat plausible (which doesn't mean it is plausible) is the whole 'Microsoft is micro-managing us and we don't want to make Halo for the rest of our lives'. Working on a big AAA title like Halo is a double-edged sword: it is exciting as hell and looks great on your resumé, but you're a cog in a very big machine and there will be much more people above you who have very strong ideas about what you should be doing (e.g. 'more Halo' but also 'move that rock to the left'). Also, big and expensive does not guarantee good management, but it does guarantee high pressure.

On the other hand: EA has shown you can create a studio where people just make incremental upgrades year after year after year, and do a very good job of it. The people at some EA studios, notably the EA Sports studio in Canada, have a different mindset and culture from typical developers, but they are great at what they do - just don't ask them to build a new IP from scratch. Who says Microsoft couldn't do the same thing with Bungie? Sure, senior people would leave - they already have - and over time the spark that made Halo special would probably go away. But, sadly, this scenario is way more plausible than an amicable split.

In my opinion this is just a rumor. One that could affect Microsoft's share price. Coincidence? We will see.

(Thanks Chris.)

Update: It's not a rumor anymore.