Because Xbox is one of the most profitable divisions of Microsoft and Halo is their flagship franchise. If they killed Master Chief they would be kneecapping their sales and marketing.
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But surely it wouldn't be up to Microsoft to kill him off or not?
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Yes it would. 343 Industries is a wholly owned studio of Microsoft. They answer to Kiki Wolfkill, head of the Halo franchise properties, and Phil Spencer, who is the head of the Xbox division for Microsoft. He answers to the the Microsoft board of directors. So yes, the decision to kill Chief would have to come from somewhere within the Microsoft hierarchy.