"Havok, the leading provider of physics engines to the global game and movie entertainment industry, today
announced that it has signed a perpetual licensing agreement with Microsoft Game Studios in which Havok's core Physics, Animation and Behavior products, plus future products, will be made available to all Microsoft
internal studios and development partners worldwide. In this unique deal, Microsoft game creators that choose to license Havok Physics will automatically receive Havok Animation. Havok's industry-pervasive physics engines and software tools enable video game and PC developers to speed development time, keep costs in check, improve internal efficiencies and reduce overall development risk."

Every penny counts for the developers, so this is a pretyy smart move on the part of M$ to ensure that they do their part to keep development cost of game makers as low as possible.  It also motivates developer to desgin games with the 360/PC in mind.

http://prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-06-2008/0004862591&EDATE=

Good news!

I've been saying for years that hardware companies (N, Sony, MS) need to start licensing various middlewares and giving them to developers that publish on their system, to speed up development time and reduce costs.

IMO, how compelling would it be if a company that made a game exlusive for a system would get Havok, UE3, and a few other engines for their game?

Either way, this is great news!

Smart move from M$.

I have a sneaky suspicion that M$ will become far more active in the development of IP content, to counter the consolidation of developers under the big 3 (look at what might happen with Mass Effect, vice Halo).  Looking at the Wii, the first party content is what's driving profits at Nintendo to level of such magnitude...all the top games on the console are ALL first party.  I think M$ is looking at the model, and figure while you don't necessarily have to DO the development, what you can do is to provide the tools and perhaps even some IP development assistance to have the developer design the gaming experience.  It seriously cuts cost and risk for the developer and expedites the process of making game...or course it's a greater financial risk for the person providing the funds, but that's hardly a issue for M$.

Sony licensed Havok's tools back when the dev kits were new..... same with M$. is this a renewed contract?

This should help all of their studio.

Yet another large step in exclusive acquisition. Microsoft in one deft move has increased the financial incentive of developers to focus their efforts on developing games for their platforms. This should definitely decrease the development costs. Which not only makes developing for the 360 more appealing, but also makes developing for the PS3 less appealing.

Microsoft really is working an assault on multiple fronts it seems. First with the exclusive game acquisitions. Then the new price fronts announced this year. Now they are attacking the development costs. I am curious as to how Sony is going to respond to this. I would wager that Sony is going to have to work down its licensing fees.

Definitely a good find this development alone will probably net Microsoft a dozen more exclusive titles every year. That is not to say high end titles that are looking to sell three or four million, but titles looking to sell somewhere around five hundred thousand units most definitely. This should make smaller developers even more prone then they are to focus on Microsoft.

Umm... Sony did the same ages ago... read ssj's post. 

Quotes from the link: 

"Microsoft has been licensing Havok products since 2001" 

"Havok works in partnership with the world's best known developers, including Sony, Nintendo, Microsoft, EA, Ubisoft and Pandemic Studios." 

"In this unique deal, Microsoft game creators that choose to license Havok Physics will automatically receive Havok Animation. Havok's industry-pervasive physics engines and software tools enable video game and PC developers to speed development time, keep costs in check, improve internal efficiencies and reduce overall development risk."

Every penny helps in development cost, and M$ is providing more incentive to at the very least, ensure all top titles developed find their way to the 360 and PC.