By Franklin Paul

NEW YORK (Reuters) - Microsoft Corp geared up on Monday to launch "Halo 3," the acclaimed science-fiction video game that it hopes will widen its lead over rival Sony Corp in the battle for industry dominance.

Shoppers lined up before dawn in New York, many hours before the midnight sale of "Halo 3," the equivalent of a new "Harry Potter" book or "Star Wars" film for the $30 billion video game industry.

The game, in which players try to save humanity from an army of aliens, has drawn wide praise from reviewers for its lush settings, cinematic story and breadth of features.

"I was caught between buying the PlayStation 3 and Xbox 360, but there are certain games like 'Madden '08' and this one that pushed me to Xbox 360," said Darnell Jefferson, 25, who was second in line at a Best Buy store on Manhattan's Fifth Avenue.

Microsoft is counting on the game, the final chapter in a trilogy that began in 2001 with the launch of its original Xbox game console, to boost the company's money-losing entertainment unit into profitability.

Microsoft is backing the game with a marketing blitz that includes celebrity-studded midnight sales events at some 10,000 retailers across the United States.

Gaming retail chain GameStop Corp said the title set a record for advance orders, while Microsoft expects initial demand to surpass that for 2004's "Halo 2," which racked up $125 million in its first 24 hours.

Uchendu Nwachukwu, 28, a freelance Web designer who was first in line at the Best Buy store, said buying the game was not as important as experiencing what will probably be a major media event when the doors open.

"They are going to make it a big event, lots of celebrities out here, concerts and prizes, all sorts of craziness," said Nwachukwu, who claimed his space at 6:30 p.m. on Sunday, nearly 30 hours before the launch.

"If it was just about the game," he said, "I would have gone on Tuesday to the store and got it."

The first two "Halo" games have sold a combined 15 million copies and cemented Microsoft as a serious player in a video game industry that was dominated by Sony's PlayStation 2.

Microsoft hopes "Halo 3" will work similar magic for its Xbox 360. The console debuted in late 2005 and has enjoyed stronger sales than PlayStation 3, which is more expensive and so far lacks any "system-seller" games like "Halo 3."

"Halo 3" is targeted firmly at the Xbox's core audience of young males, for whom realistic combat games are a staple. It does little to widen the machine's appeal to a more casual audience that is being courted with tremendous success by Nintendo Co Ltd's Wii console.

The title is "not necessarily going to move a lot of new systems like the first 'Halo' did," said Dan Hsu, editor-in-chief of the EGM gaming magazine.

"At the same time, with all the marketing blitz and hype, consumers will be out there," Hsu said, "and if they are thinking video games, they are thinking one of two things: 'Halo' or the Wii."

(Additional reporting by Scott Hillis in San Francisco)
© Copyright 2007 Reuters.

Photo:
Guests mingle during the Xbox 360 "Halo 3" Multiplayer Beta video game preview party at Quixote Studios in Los Angeles May 15, 2007. Microsoft Corp geared up on Monday to launch "Halo 3", hoping it will widen its lead over rival Sony Corp in the battle for industry dominance. REUTERS/Mario Anzuoni