Microsoft buys game developer

Microsoft continued to show its seriousness in becoming a dominant player in the electronic-game industry with the announcement yesterday that it had reached an agreement to acquire Digital Anvil, a leading developer.

The deal brings a "huge amount of resources and gives Digital Anvil a little more stability," said Chris Roberts, who founded Digital Anvil and is one of the leading creative forces in computer games.

Roberts said he began talking with Microsoft about an acquisition about six months ago, as game development--with each new title trying to outdo the latest, greatest--has moved beyond the resources of many independent developers.

Terms of the deal were not disclosed. Digital Anvil has about 100 employees in Austin, Texas.

Microsoft has had a tight relationship with the private company since 1997, publishing one title, StarLancer, earlier this year.

The crown jewel in the deal may be "FreeLancer," a space-simulation game still in development and expected to be introduced late next year. Buzz about the game has reached such lofty levels that, even in far-from-final form, it won four awards at the Electronic Entertainment Exposition (E3) in 1999. The scope and ambitiousness of the game--"It's basically building an entire universe," Roberts said--have kept it in development so far.

Ed Fries, vice president of Microsoft's games publishing, said the acquisition gives Microsoft a presence in Austin, considered a hotbed of game development. "It lets us bring together the whole team working on a project," he said. "In this case, what we'll do is rebuild the whole team in Austin."

The deal follows one tactic Microsoft has employed in executing its increasingly important game strategy: acquiring top game-development companies. Over the past few years, it has bought Access Software (creator of the "Links" golf games), FASA Interactive Technologies ("MechWarrior") and Bungie Software Products ("Halo").

Also crucial is the development of the Xbox, a video-game console expected to be introduced in fall 2001. Much awaited by game players, the Xbox will plunge into increasingly intense competition with Sony, Nintendo and Sega.

Besides "FreeLancer," which is a PC game, Digital Anvil is developing an unnamed title for the Xbox.

Roberts, known for the "Wing Commander" titles, is leaving Digital Anvil, but will continue to work on developing "FreeLancer." He said he will spend time "recharging my batteries" and look for opportunities that will emphasize creativity.

Those could include working on movies, something he did in writing and directing the 1999 movie "Wing Commander."