Microsoft has snapped up Macintosh games developer Bungie Software to develop games for its forthcoming games console, the X-Box.

Chicago-based Bungie was formed in 1991 and has developed action and multiplayer games primarily for the Mac, including The Fallen Lords, Myth and Marathon. The company generates between $5m and $10m in sales a year.

Exact terms of the deal have not been disclosed, but it is believed to be worth between $20m and $40m.

Following completion of the deal, Bungie's development staff will become an independent development studio within Microsoft's own games division. Microsoft said maintaining a separate division for the company will help it retain its "unique character and edgy personality".

In addition to developing games for the X-Box, which is scheduled to hit shops in the US and Europe by autumn next year, the Bungie team will also continue to develop titles such as its much-anticipated action game, Halo.

Alexander Seropian, founder and chief executive of Bungie, said: "Microsoft will provide us with the resources and infrastructure we need to continue to build great games and make them available on a worldwide scale. We are also looking forward to helping define the X-Box platform, which may soon be the world's premier game console."

Last year Microsoft bought two other games developers - Fasa Interactive Technologies and Access Software. The company said its forthcoming MechWarrior 4, Venegance, Crimson Skies and Links LS 2001 PC games, out later this year, were developed as a result of the acquisitions.