http://videogames.yahoo.com/events/plugged-in/why-halo-reach-s-success-could-be-bad-news-for-business/1411083

Downside of new Halo game's success

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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For some reason, I doubt Yahoo has ever accused Sony and Nintendo of hurting 3rd parties by having successful 1st party games.

If anything, Halo is the reason shooters perform so well on the 360!!!! Just my opinion ofcourse.

Wow, the game industry must be really desperate if they are complaining about games being too replayable.

where did you find this???? im not even a Halo fan and this comes off as a hating article. SW, Tron & NFS???? same demographs???? those arent even FPSs they are completly different genres. MOH & COD are multiplats. I dont think most Wii or PS3 owner is going to run out and get a 360 just to get one game. I think these other devs are just afraid of its success

It was the top story on Yahoo.com a little while ago.

i don't think anyone needs to worry too much

I only read the first bit...

"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."

In the link they use, in the first paragraph it states the $200 is Worldwide. Not the US.

Fail article is a fail from the start.

Gregory, don't come whining to me about market forces. And don't expect me to punish citizens for showing a little initiative. If you don't like what Fontaine is doing, well, I suggest you find a way to offer a better product.

It is the release date that is at fault the game industry needs to learn that the majority of the big release should not all release during the fall and winter months. If they spread games throughout the year people would buy smaller releases new more often  during the slow summer months. I know I would, During the winter I choose games that have proven their worth, fun and value over new IPs, why?

Because I have limeted money and I want to gurentee my moneys worth.

to the game industry stop putting every game out during th late summer, fall, and eary winter. Dah.