Cary-based Epic Games turned its “Gears of War” games into an entertainment franchise – toys, a board game, novels, action figures. Now the company has sold the franchise to Microsoft, which has been the publisher of the games. A former Epic executive takes over the Gears empire at Black Tusk Studios in Vancouver, British Columbia.

Microsoft and Epic announced the deal Monday.

In 2001, Microsoft noted that “Gears of War 3” sales had propelled videogame franchise past $1 billion in sales. A fourth version was launched last year. In all, the games sold more than 22 million copies.

Microsoft noted at that time Gears was the first game developed only for the Xbox 360 franchise to top the $1 billion mark. Many games are published across multiple platforms so they can be played on Playstation, personal computers and others.

Financial details of Monday’s were not disclosed. Epic is privately held.

WRALTechWire Analysis:

  • Why did Epic sell its Gears franchise? And industry insider offers his insight.

Taking over the Gears franchise is Rod Fergusson, who left Epic last year as part of a general migration of executives from the firm after 40 percent of the company was sold to China Internet giant Tencent.

Among those who left was Cliff Bleszinski, the creative guru for the franchise who is contemplating starting his own venture. He still lives in Raleigh.

“Epic Games has reached an agreement to sell the ‘Gears of War’ intellectual property rights to Microsoft. We’re very proud of the franchise we built in close partnership with Microsoft over the past decade and are happy that this agreement enables Microsoft to forge ahead with the ‘Gears’ universe on their industry-leading platforms as Epic concentrates its efforts on new projects,” said Epic founder and CEO Tim Sweeney in a statement. “Epic remains totally dedicated to supporting Xbox One and is licensing the Unreal Engine 4 technology to Microsoft in support of their future projects.”

Q&A About the Sale

Microsoft provided the following Q&A about the decision:

Today we’re excited to announce that Microsoft Studios has acquired the rights to the “Gears of War” franchise from Epic Games, including rights to all existing and future games, entertainment experiences and merchandise. In addition, we are excited to announce that Black Tusk Studios in Vancouver, BC will take over development of the “Gears of War” franchise and that Rod Fergusson, former Director of Production at Epic Games on the “Gears of War” franchise, will join Microsoft and play a key studio leadership role at Black Tusk on the development of the franchise going forward. We had a chance to chat with Phil Spencer, Head of Microsoft Studios, Hanno Lemke, General Manager of Black Tusk Studios at Microsoft Studios, and Rod Fergusson about the big news.

  • Why did Microsoft purchase the “Gears of War” franchise?

Phil Spencer: It all comes back to our commitment to Xbox fans. The “Gears of War” franchise has a very strong, passionate and valued fan base on Xbox. Over twenty-two million units have been sold across all “Gears of War” titles worldwide, grossing over $1B dollars (US). This franchise, and these fans, are part of the soul of Xbox. By acquiring this franchise, Microsoft Studios will continue to offer them more of their favorite games and entertainment experiences from the “Gears of War” universe.

  • Why did Epic Games agree to this acquisition?

Hanno Lemke: Epic has been a tremendous partner to work with, and it has been a privilege for Microsoft to be Epic’s publishing partner and work together to achieve the phenomenal success of the “Gears of War” games. Epic remains great partners and good friends of Microsoft Studios. In fact we will collaborate closely with Epic to ensure the inclusion of the Unreal Engine technology into the “Gears of War” franchise going forward remains consistent with the high quality fans have come to expect from the franchise.

  • Why was an as-yet-unproven studio like Black Tusk chosen to lead the “Gears of War” development over a more established studio?

Phil Spencer: Black Tusk has assembled a world-class team with deep experience and passion for the shooter space, and specifically the “Gears of War” franchise. I am extremely confident that under the leadership of Hanno Lemke, Rod Fergusson and our other leaders in the studio, Black Tusk is well equipped to take on the future development of the “Gears of War” franchise.

  • Are there plans to bring anyone who worked on previous “Gears of War” games onboard to work on the future of the series?

Hanno Lemke: The news that Rod Fergusson is joining Black Tusk should be really exciting for fans of the franchise. Rod has played a leadership role at Epic on all of the “Gears of Wars” games, he understands the franchise deeply but equally importantly he understands the fans of the franchise – what they love, where they want to see the franchise evolve. Once the news spreads about the opportunities at Black Tusk, I’m confident we’ll see interest from a number of talented developers who share the same passion for the “Gears” franchise as the developers at Black Tusk.

  • When can we expect to hear more about the plans for the “Gears of War” franchise?

Hanno Lemke: We hope to be able to share more news about “Gears of War” later this year.

  • You’re moving back to Canada and back to working on the “Gears” franchise. Is it like a homecoming for you?

Rod Fergusson: I’m extremely excited to be joining Black Tusk Studios to oversee development on the “Gears of War” franchise. I’ve been privileged to work on a lot of great games with a lot of great teams, but “Gears” has had the most impact on me professionally and personally, so this really feels like a homecoming. I can’t wait to share more with you all soon.