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Why Halo: Reach’s success could be bad news for business

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Halo: Reach

So now it's official: Microsoft's first-person behemoth Halo: Reach is the year's biggest entertainment event, generating $200 million in sales in just 24 hours in the United States alone.

That's two-thirds of what Call of Duty: Modern Warfare 2 took in from the North American and U.K. markets in its first day last year, but it's still a number that's nothing to sneeze at. The one-day take already eclipses the three-day opening weekends of "Iron Man 2," "Toy Story 3" and "Alice in Wonderland."

While Microsoft is doing cartwheels, though, the rest of the gaming industry is nervously shuffling its feet. Despite a number of high profile releases, it hasn't exactly been a banner year for game sales -- and the success of Reach might not help things.

The slump is due, in part, to the ongoing recession. But also deserving some of the credit is the lingering effect of Modern Warfare 2 — a game whose multiplayer component was so deep and so rich that it kept players hooked, reducing their need and desire to buy other titles.

Fatigue is finally starting to gradually set in for that game, but Halo: Reach may well pick up that mantle.

As much praise as the game's single-player campaign is getting, it's the rich multi-player mode that really has players excited. New armor abilities, new game modes and an impressive suite of creation tools have overwhelmed the Xbox Live user base with joy. And the game's matchmaking service is working like a charm so far.

That's a lot of reasons to play -- and could give buyers plenty of excuses to put off other purchases in the coming months.

"There's always a worry that a game like that can take share and cannibalize other games," says Colin Sebastian, an analyst with Lazard Capital Markets.

To add to worries, Call of Duty: Black Ops will be hitting shelves in less than two months — a one-two punch to other game developers. That could put a number of seemingly big titles on the bubble, their sales in jeopardy.

None seems in a more perilous position than EA's Medal of Honor. The battle that was shaping up between the rebooted military shooter and Call of Duty was already a tough one, but with Halo: Reach potentially impacting people's buying decisions, the game could face an even tougher challenge. (The game's controversial decision to allow players to fight as Taliban forces in multiplayer might not help, either.)

Medal of Honor is actually scheduled to hit shelves well before Black Ops, but it has been three years since the last version — and Call of Duty has become the industry's biggest seller in that time. The hope, in part, was that the Call of Duty fan base would buy Medal of Honor as a placeholder while waiting for the release of Black Ops — but they could be too busy with Reach to do so.

Meanwhile other titles like Star Wars: The Force Unleashed II, Need for Speed: Hot Pursuit and Tron: Evolution, which all would normally appeal to the same general demographic, might be overlooked entirely.

"I see Halo: Reach creating a vacuum in multiplayer," says Billy Pigeon of M2 Research. "I expect it will have an effect similar to 'Modern Warfare 2'. People will be playing online and may not buy other games."

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