I know very little about Epic's financials, however I do know that they are currently only known for two gaming franchises, Gears of War and Unreal Tournament 3.  The former recently made Epic a LOT of money both directly in terms of sales, and indirectly in terms of the number of developers that became licencees to their Unreal Engine 3 after seeing Gears of War.  The latter, Unreal Tournament 3, just cost Epic what is probably a considerable amount of money when it flopped horribly on the PS3 and PC.  Though some of this may be recouperated through a 360 version, it is still unlikely to be profitable.

In my opinion, this is the time for Microsoft to push for Gears of War exclusivity beyond Gears of War 2 (my understanding is that they only have publishing rights for versions 1 & 2).  Epic have only two significant properties, one of which has been immensly successful and was developed with large Microsoft input, the other of which may just be pronounced dead after it's abysmal sales.  This is the perfect time for Microsoft to step in and offer Epic a little money (to pad their half-yearly bottom-line out after UT3's failure) in return for a couple more exclusive Gears of War games, or perhaps another exclusive IP.  Thoughts? 

To clarify, I am not suggesting anything dramatic like Microsoft buying Epic out or strong arming them in any way. Im just saying that this might be a good time to remind Epic that they have had strong success through Microsoft these last 18 months, and offer them a chance for that strong, mutual success to continue for a greater period of time.

Epic would be bigger morons than they already are, after the UE3 debacle with Silicon Knights and the pathetic UT3 sales on PS3/PC, to not be hip deep in Gears of War 2 development by now. They better pray they get that out by holiday 08 if they want to generate any kind of decent software revenue for Midway which already seems to lose money every quarter.

Considering we've seen nothing of Gears 2, I guarantee you that FFXIII will be released before Gears 2.

I love it when people make baseless guarantees about things they have no idea about. We hadn't seen anything of Rainbow Six Vegas 2 a few weeks ago yet it'll be out over a year before FFXIII. Common sense sinking in yet? You don't know anything about any of those games development so don't guarantee anything as it is pointless and you aren't in any real position to make any valid guarantees.

Seriously, you don't work on either of these games, what goes through your mind that you think you have any justification in guaranteeing anything? Anymore insider info you happen to have?

Nah i reckon Gears two will be out either Christmas or before the end of next financial year

 Well, since I do work in the video game industry I do have a good idea of how things flow but I don't really need to know that because it's just common sense. 

Epic takes their time on everything they do.  If I remember correctly Gears of War was released towards the end of 2006.  If Gears of War 2 were released at the end of 2008, that would be a two year project cycle.  Two years is not a long time and I promise you they will take longer than two years to complete that game.  You only take two years to make something if you're on a tight schedule with a stingy publisher breathing down your neck.  Microsoft Game Studios knows Epic is a proven studio and knows that if they need the time they can have it because they will make a quality game that will make money.

If I had to take a guess, I would expect Gears of War 2 mid to late 2009. 

I think MS would much rather sink it's cash in other projects. By the time Gears 3 hits the war should be pretty much decided and it being an exclusive or not really won't matter much.

You're using circular reasoning and you're foolish. "Games sales suck when they have small ad budget. UT3 had a small ad budget, therefore UT3 sales sucked."

How did you reach the conclusion that UT3 didn't do well ONLY because it didn't have Gears ad budget? Did you factor in that maybe UT3 sucks? UT is the dead horse and Epic keeps kicking it.

I don't get your point with Unreal Tournament failing on PC/PS3, I'm sure if a game like Gears of War 2 was released on PS3/PC it would have done MUCH better. The Unreal franchise is not that popular anymore and there was no advertising, it's not like it will do great on 360 either.