Studios pull out of Halo film

Microsoft's ambition to get a big-budget Halo movie into cinemas has taken a knock this week, with film studios Universal and Fox pulling out of the deal they had struck with the software giant after a last-ditch attempt to renegotiate terms was rebuffed.

The film has been attracting controversy in the movie business since Microsoft first sent the Alex Garland (The Beach, 28 Days Later) penned script to studios, with one of the most hefty price tags ever seen for a licensed property attached to it - as well as a demand that Microsoft Game Studios and developer Bungie be given almost complete creative control over the project.

Despite these terms, Fox and Universal reached an agreement whereby they would team up to fund and distribute the movie - but just ahead of a key October 15th milestone date, the studios approached executive producers Peter Jackson and Fran Walsh demanding that their deals should be improved. Jackson and Walsh refused, and now Fox and Universal have pulled out, leaving the Halo movie without funding or a distribution deal.

Although rumours have reportedly been flying around Hollywood in recent weeks that the budget for the film has skyrocketed to over $200 million, making it into one of the most expensive videogame movies in history, a spokesperson for Jackson and Walsh denied that vehemently in comments made to film industry bible Variety.

"The only budget the filmmakers every spoke about was $145 million less the 12.5 per cent rebate that you get from shooting in New Zealand, which would put it at about $128 million," spokesperson Ken Kamins told the magazine. "That was the only number that was ever discussed."

Although losing the involvement of the studios is obviously a big deal for the Halo movie, all is not lost - and pre-production work is continuing apace at Weta Digital and Weta Workshop, the New Zealand based visual effects companies which Jackson created to build the Lord of the Rings movies.

Meanwhile, Microsoft is said to be in talks with other distribution partners already - and given the growing strength of the Halo brand, it seems unlikely that the movie will be without a studio partner for long. Microsoft's commitment to developing the Halo franchise was demonstrated clearly at X06 last month - with the firm revealing that as well as the upcoming Halo 3, work is also underway on a strategy title, Halo Wars, as well as a new trilogy of products set in the Halo universe which will be helmed by Peter Jackson.