The email is as follows :

"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)"

Upon closer examination, though, it appears rumors of Bungie's impending independence have been greatly exaggerated. For one, the blog post was not written by anyone on the Post-Intelligencer's staff, as evidenced by the note at the top of the page that reads: "P-I Reader Blogs are not written or edited by the P-I. The authors are solely responsible for content."

The author of the post is one Jacob Metcalf, whose earlier Bungie-related posts include the enlightening "Even orange cats love Halo 3" and "LOL HALO 3!" He is the editor of the 8bitjoystick.com, a self-styled "e-zine for nerds" that has published such weighty articles as "Siracha [sic] Hot Chili Sauce: The Condiment of the Future" and "Separate Lists on Netflix is The Key to Romantic Cinematic Bliss" since its inception in 2002. Virtually all of 8bitjoystick.com's most recent posts also appear as reader blog posts on the Post-Intelligencer's Web site.

Metcalf's latest scoop is sourced as being from an e-mail "from a friend of mine" who claims the Bungie/Microsoft separation will be announced soon. The impetus behind the looming divorce is explained thusly: "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 [sic] they are with the profits (comparable to the rest of the industry). So as of today they are their own independent entity."

Though Metcalf repeatedly defends the integrity of his source as being beyond reproach, he overlooks one major flaw in the story. Namely, that Bungie has been owned lock, stock, and barrel by Microsoft since 2000. Although employees of a first-party developer are free to leave and start up their own shop, said developer is part of its parent company, and can't simply leave said parent of its own accord even if said parent manages it into oblivion. A perfect example is FASA Studio, which Microsoft bought in 1999. The following eight years saw the shop release a series of decreasingly popular games--including Crimson Skies and Shadowrun--until Microsoft shut it down last month. However, many of FASA's top developers left to found their own independent shop, Day 1 Studios, which developed Microsoft's MechAssault games and LucasArts' forthcoming Fracture.

The official story: Bungie referred all inquiries to Microsoft, which had its reps issue the following statement: "There's been no such announcement. We continue to celebrate the tremendous success of the global phenomenon that is Halo 3." [UPDATE] Metcalf has now responded to GameSpot, and asserted his source is very close to Bungie--about as close as one could be without actually working there.

Bogus or not bogus?: Bogus that Bungie's entire operation is uprooting itself from the Microsoft campus of its own volition and taking the Halo brand with them. Not bogus that, now that the Halo trilogy is done, many of the developer's staffers are likely pondering following in the footsteps of Bungie founder Alex Seropian, who left to create indie shop Wideload Games (Stubbs the Zombie) in 2004.

Bloggers break big news stories all the time and this story has legs and the Internet chatter is flaming on.

It looks like Game Informer has a source in Bungie that is collaborating on what my source told me. Kotaku and (grudgingly) Joystiq are agreeing with Game Informer that there is something to my original reporting. Even my pals at the Stranger chimed in on it.

Game Informer writes:
Our source stated that Bungie is tired of Making Halo, and didn't want to do future Halo games. For an unstated, but significant amount of money, Bungie shareholders bought the studio name back from Microsoft. Our source also revealed that even though Microsoft will retain the rights to Halo, Microsoft also has the right of first refusal on future games This means that Microsoft has the first shot at publishing Bungie's future titles. How this will come into play if Bungie decides they want future game X to appear on the PlayStation 3 and Wii alongside an Xbox 360 release will make things quite interesting.

With in a matter of hours my first post went from being wild rumor to the possible tip of an iceberg.

What could my source's original letter mean? I think they actually were talking about non-competition and/or employee retention clauses that might have ended seven years after Microsoft bought Bungie back in 2000 rather than Non-Disclosure Agreement or a NDA. But the official Microsoft press blackout is in full effect and they are not denying or confirming the content of the rumor at this time. Normally they would have shot this down instantly.

What could happen? A bunch of things..

1. Some major developers leave and form a new company. It's happened before to a lesser extent. I loved Stubbs The Zombie.

2. Microsoft spins off Bungie into a separate company that can publish for whatever platform they want and gives them their blessing as long as they make awesome games for Xbox 360.

3. Bungie tries to aggressively leave and Microsoft tries to stop them. A bloody battle ensues and everyone looses. This is the worse-case scenario for both Microsoft and the "Halo Nation".

4. People in Bungie is trying to leak rumors to help them leverage their worth in better future deals with the higher ups at Microsoft. Also Microsoft might be trying to inoculate against the rumor of Bungie attempting to leave after Halo 3. So far Microsoft stock value has been doing super this week.

5. My source totally punked me and the entire internet. This is actually the least likely and I don't want to sound like a skipping CD but I am standing by my source at Bungie/Microsoft. I applaud skeptics and critical thinkers. I know that only having one source is iffy in journalism but sometimes it pays off big.

Regardless of what combination of scenarios plays out the changes will likely be benign and I am sure that both Bungie and Microsoft will be making awesome games in the future but there might be some shifting around in the corporate flow charts.

However in the past couple months there have been some issues with game developers close to Microsoft Game Studios. FASA games was shut down and Bizarre Creations did not renew their exclusive contract and was purchased by Activision who is going to take them multi-platform. (I can't wait to get Project Gotham Racing 4 today!) Microsoft has the right to make more Project Gotham Racing games but the original developers at Bizarre and not going to be a part of it. I am skeptical if the fifth PGR game is going to capture the magic of the first four games that were made by Bizarre. In the past many successful video game franchises have met their slow demise when they get handed off to an outside team. It's hard for someone else to keep the magic in the series going when all the creative and talented individuals move on to different things.

I don't think that this is necessarily a bad thing for Bungie fans or the Xbox platform. Halo is awesome but it is just one game. The Xbox platform has hundreds of great games and the best online experience. For the record I love Bungie, Xbox and Microsoft's gaming ventures. I met some of the Gamerscore.com blog at PAX and have the highest respect for them. I probably made their life hell this week. I still hope that I could take a trip out to Microsoft later on this year and take a tour of the Xbox group. (Major Nelson or Channel 10 If your reading this send me an Xbox message and have me on your shows.)

On Monday there were some comments on my Seattle PI blog that locks being changed at Bungie. There was a comment the next day about the locks being upgraded to be more compliant with the Americans With Disabilities act. I don't think the locks being changed is a big deal. But something is still up and it is unfortunate timing that it was the day that they worked on the doors.

So far my favorite comment on this is from a Kotaku reader on their first post.
"MS just wants Bungie to keep doing Halo games? Get the **** out! "

There are some websites that I read and respect that slagged me from one side of their mouths and then covered their butt saying that it might actually happen out of the other side. I did beat them to the punch and I had an inside source at Bungie/Microsoft that they did not have.

If it had just wanted attention I would have posted about the Halo girls soft core pr0n. Or really made stuff up.

As a side note to Gamespot readers my girlfriend was happy to get a disc from her separate Netflix list yesterday and I had Sriracha Hot Sauce on my dinner.. It's the condiment of the future.

Our source stated that Bungie is “tired of Making Halo, and didn’t want to do future Halo games.” For an unstated, but significant amount of money, Bungie shareholders bought the studio name back from Microsoft. Our source also revealed that even though Microsoft will retain the rights to Halo, Microsoft also has “the right of first refusal on future games.” This means that Microsoft has the first shot at publishing Bungie’s future titles. How this will come into play if Bungie decides they want future game X to appear on the PlayStation 3 and Wii alongside an Xbox 360 release will make things quite interesting.

We contacted Microsoft, and their boilerplate statement basically skirts the issue.

“There’s been no such announcement. We continue to celebrate the tremendous success of the global phenomenon that is Halo 3.”

After every Halo release, members of Bungie have departed to form their own development houses such as Certain Affinity and Wideload Studios. Why would Microsoft actually let go of the company who single-handedly made Xbox what it is today is the big question. And for that, Microsoft nor Bungie have revealed a true answer.