The Halo Effect of Microsoft's Halo

It's been a while since customers lined up outside stores at midnight to buy a Microsoft (MSFT) product. That may change on Sept. 14, when Microsoft releases Halo: Reach, the fourth installment of its blockbuster Xbox video-game series.

Since the first release of Halo in 2001, the alien-invasion-themed game and its appurtenant books, toys, and apparel, have generated $2 billion in sales for Microsoft. That's not including the Xbox consoles and online game subscriptions the games have helped sell. Microsoft expects Halo: Reach to generate more revenue than the series' biggest seller so far, 2007's Halo 3, which brought in sales of more than $600 million. Operating margins on the games hover around 60 percent, estimates Wedbush Securities analyst Michael Pachter.