Microsoft has confirmed plans to spin off its Bungie Studios gaming unit as an independent company. Bungie develops the hugely popular Halo franchise.

Microsoft will retain an equity interest in Bungie, and will continue the long-standing publishing agreement between Microsoft Game Studios and Bungie for the Halo properties.

The same agreement will apply to future properties developed by Bungie.

The Xbox 360 exclusive release of Halo 3 achieved $300m in global sales in its first week, becoming one of the most successful entertainment properties in history.

"Our collaboration with Bungie has resulted in Halo becoming an enduring mainstream hit," said Shane Kim, corporate vice president at Microsoft Game Studios.

"While we are supporting Bungie's desire to return to its independent roots, we will continue to invest in our Halo entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the Halo universe.

Harold Ryan, studio head at Bungie, added: "We will continue to develop with our primary focus on Microsoft platforms.

"We greatly value our mutually prosperous relationship with Microsoft Game Studios, and we look forward to continuing that affiliation through Halo and beyond."