PlayStation maker Sony on Monday announced a $3.6 billion (€3.2bn) deal to buy US video game studio Bungie, creator of hits like ‘Halo’ and ‘Destiny’, as a gaming industry battle heats up against Microsoft.

Sony’s deal to buy Bungie comes on the heels of Microsoft announcing a landmark $69 billion agreement to acquire Activision Blizzard, boosting its power in video games by scooping up the scandal-hit ‘Call of Duty’ maker.

“This is an important step in our strategy to expand the reach of PlayStation to a much wider audience,” Sony Interactive Entertainment chief Jim Ryan said of the Bungie buy.

Bungie is based not far from Microsoft headquarters in the state of Washington, and its ‘Halo’ franchise is considered to be among the video games that contributed to the popularity of Xbox consoles. Since it was founded in early 1991, Bungie has created games for play on rival PlayStation and Xbox consoles as well as on computers powered by Microsoft Windows software.

Since it was founded in early 1991, Bungie has created games for play on rival PlayStation and Xbox consoles as well as on computers powered by Microsoft Windows software

Bungie is to remain an independent studio, making games for play on competing devices, according to Sony. “We will continue pursuing our vision of one, unified Bungie community, building games that value our community and meet them wherever and however they choose to play,” studio chief Pete Parsons said in a release. “Both Bungie and SIE believe that game worlds are only the beginning of what our IP will become.”

The sector is booming, with publisher Take-Two announcing a deal in January to acquire ‘Farmville’ creator Zynga for $12.7 billion, in a major mobile gaming push by the maker of ‘Grand Theft Auto’.

Microsoft says that merging with troubled but highly successful Activision will make it the third-largest gaming company by revenue, behind Tencent and Sony, a major shift in the booming world of games.