Gamers at the invitation-only preview gave mixed reviews.
"The graphics can use some work ... They're not much different than the previous Halo," said Nicholas Puleo, editor of gaming news Web site Evilavatar.com.
"They've got five, six months until release, so they'll add some polish ... When I compare it to other things in the platform, it's not standout."
Microsoft held previews in New York and San Francisco on Friday in advance of the public test, or "beta," of the game, which goes live next Wednesday.
A public beta is unusual for a console game, and the one for the flagship title for Microsoft's Xbox 360 is being closely watched by gamers eager to know how it looks and plays, and whether it will live up to the considerable buzz.
"I definitely believe that 'Halo 3' is going to be bigger than 'Halo 2'. Retailers know what 'Halo 2' did and they are not going to want to be caught out of stock," Shane Kim, head of Microsoft Game Studios, told Reuters.
The first "Halo" helped the original Xbox gain a foothold in the highly competitive video-game market, while the second installment became the top-selling game ever for the system, with sales of $125 million—roughly 2.5 million copies—in its first 24 hours of availability.
Microsoft plans to launch "Halo 3" in the autumn, Kim said. The first two games were released in November of 2001 and 2004 ahead of the year-end holiday season.
"I believe this is going to be one of the three biggest consumer entertainment events of the year, along with 'Spider-Man 3' and the new 'Harry Potter' book," Kim said.
"This is going to be a huge competitive advantage for us. Sony has nothing like it."
The game once again puts players in control of "Master Chief," a futuristic soldier trying to save humanity from an alien coalition known as the Covenant.
To make things more realistic, game maker Bungie Studios made the movements in "Halo 3" more closely follow the laws of real-world physics.
Dead bodies float. Grenades tossed in snow stay in place, while those thrown on harder surfaces skip and roll. Bullets ricochet off walls. And gamers' characters straying too close to grenades will be maimed by their shrapnel effect.
The games have also driven adoption of the Xbox Live online gaming service, which offers some basic features for free but charges users about $50 a year for being able to play against other gamers.
In addition to being one of the year's hottest-selling games, the publicity surrounding "Halo 3" should also spur some consumers to run out and buy an Xbox 360, said Craig Davison, Microsoft's director of marketing.
"There's a significant number of people just waiting for that one game," he said, "and this is the game."
DAMN! I'm soooo waiting for HALO 3 ... 
