Tuncer Deniz worked at Bungie as a producer from 1996 to 1998 and served as the project lead on Myth 2, but he stayed in contact with top Bungie execs. After recently hearing the story of how Steve Jobs got angry when Bungie went to Microsoft in 2000, Deniz decided to tell us what had happened as he heard it. Turns out that Steve Jobs was angry for a very simple reason: he had wanted to purchase Bungie himself... after first turning the company down.

Here's how it went down, according to Deniz.

Of Halos and Macs

Bungie looked like it was on top of the world in 1999, having just shown Halo to an impressed crowd at Macworld Expo. But the truth was a little different; the company was rapidly running out of money, and everyone understood that it didn't have the funds to complete the project. This was around the time Microsoft started showing the first Xbox to developers, and Bungie was able to show Halo to Microsoft during a meeting in New York.

Microsoft was impressed, and it wanted the game as an exclusive for the Xbox. But Bungie wasn't interested in just selling the game, according to Deniz, it wanted to sell the company. Microsoft's Ed Fries went back to his bosses to ask for the budget to buy the developer.

"In the meantime, Pete Tamte, who used to work at Apple before joining Bungie, let [Apple's] Phil Schiller know that Bungie would likely be bought out. Would Apple be interested?" Deniz told Ars. Schiller brought the deal to Steve Jobs, who turned it down.

"The only fact I am not sure of is if at any moment Tamte told Schiller [the buyer] was Microsoft. My guess, having seen Letters of Intent before, is that Tamte did not say it was Microsoft, and was probably contractually forbidden to do so, though I bet Steve eventually caught wind that Microsoft was behind the deal and that's when he changed his mind."

Whatever the reason, Apple soon reversed its decision and suddenly became very interested in the purchase of Bungie. At that point it was too late; Microsoft had moved the deal far enough along that both parties were locked down, but the timing came down to a matter of days. If Jobs came back with a counter-offer a little quicker, Bungie would have been his.

The rest is history

It's been speculated that Microsoft paid around $30 million for Bungie, and the companies then worked together to launch the hugely successful Halo franchise, a series of games that would become Microsoft's number one weapon in the console wars. The game's graphics, on the Xbox hardware, outshone everything available on the PlayStation 2 at the time, and the multiplayer became a huge hit, popularizing first-person shooters on consoles in much the same way Goldeneye had done on the Nintendo 64.

While many gamers are still bitter at the differences between the version of Halo that was eventually released and the original Macworld video, it seems that neither game would have been finished without Bungie securing big funds from an outside source and, according to Deniz, Bungie was aggressively seeking a complete buyout of the company.

Turning down the purchase, only to find that his rivals had picked up the company to take a game popularized for the Mac and turn it into a Microsoft exclusive would certainly have angered Jobs, leading to the confrontation we described yesterday.