Universal, Fox Back Out of Halo Movie

Looks like Master Chief still has to overcome some fiscal enemies before he gets to kick some alien butt on the big screen.

A little over a year ago, Microsoft inked a deal to bring its Halo video game franchise to the big screen, with Universal Pictures handling the actual production of the movie as well as its domestic distribution, while international distribution would be handled by Twentieth Century Fox. The movie then brought on producing team Peter Jackson and Fran Walsh (Lord of the Rings trilogy, King Kong) to executive-produce the project with established producers Mary Parent, Scott Stuber, and Peter Schlessel. Pre-production has been underway at Weta Digital and Weta Workshop in New Zealand.

Now, on the eve of a required $5 million payment to Microsoft, both Universal and Fox have gotten cold feet and pulled out of the deal. According to the industry trade paper Variety and other sources, the studios pulled out of the project for the oldest and simplest of reasons: money. Budgets for the movie are rumored to have ballooned from an expected $135 million to nearly $200 million—although producers deny those reports—with Microsoft is slated to receive 10 percent of the film’s gross revenues. Both Universal and Fox apparently felt that trusting such a large project to a young, untested director—Neill Blomkamp—with so much of the gross revenue already allocated was a no-win situation: either the filmmakers and Microsoft would have to take a smaller cut, or the studios would walk. And walk they did.

Microsoft, its in-house Bungie studio (which developed the Halo game), and producers Jackson and Walsh are now looking for new studio partners for the Halo film. Jackson and Walsh have re-iterated their confidence in director Blomkamp, and pre-production continues unabated at Weta. With names like Jackson and Walsh behind it—as well as Microsoft’s influence and deep pockets—there seems to be little doubt the Halo movie will be made; it’s just a question of which studios will be involved in the production and/or distribution.

Microsoft’s relationship with Jackson and Walsh recently deepened with a deal to bring them in on the next installment of the Halo franchise, as well as create an entirely original game for the Xbox 360 platform.