Universal Pictures and 20th Century Fox are teaming up to make a feature film adaptation of Microsoft video game Halo, says The Hollywood Reporter. Under the deal, Universal will take domestic rights and Fox will handle international distribution on the project.

The deal -- based on a script by 28 Days Later screenwriter Alex Garland -- caused a stir earlier in the week when CAA sent out the script via messengers dressed as Master Chief . The deal came bearing some pretty stiff terms, including a two-hour bidding period and demands for $10 million against 15% of the gross. Reportedly that figure has been whittled down to $5 million. The script was commissioned by Microsoft, which also brought in producer Peter Schlessel to work on the project.

The film is based on the game franchise which has grossed $600 million. Halo is expected to hit the big screen by 2007.

August 26, 2005 - In June, we reported that Universal Studios and 20th Century Fox were both in negotiations with Microsoft to fund and distribute a movie based on the Redmond software company's Halo videogame series.

Negotiations appear to have succeeded, and the two companies will indeed share costs and revenues for the eventual science-fiction actioner. According to Studio Briefing, Universal and Fox will pay Microsoft $5 million plus a percentage of box office receipts to distribute the film, the former handling production and domestic release, and the latter distributing the film internationally.

In spite of the recent increase in game-based movies, film adaptations are increasingly seen as a risk for game companies and their very lucrative game franchises. Halo 2, for example, took in over $125 million in its first day of sales last year. Rather than trusting a Hollywood studio to develop – and possibly ruin – the movie, Microsoft has kept close control of the project, hiring 28 Days scribe Alex Garland to write the Halo screenplay.

Microsoft is expected to time the premiere of Halo: The Movielord to coincide with the release of the next videogame in the series, Halo 3.

Expect the Halo movie to come out sometime in 2007.

October 4, 2005 - Fans anticipating the Halo movie should be seated... Peter Jackson (Lord of the Rings, King Kong) is executive producing the game-to-film adaptation of Microsoft/Bungie's blockbuster title.

We've been hearing rumblings about this for the past 24 hours or so, but our efforts to confirm were cut short by an announcement on Bungie's website.

Bungie's Joseph Staten says, "A few weeks ago we were lucky enough to partner with two tremendous Producers from Universal, Mary Parent and Scott Stuber. In the short time they've been on board, Mary and Scott have joined with Peter Schlessel to accomplish unimaginably wonderful things. Example? They've secured an Executive Producer to help guarantee the creative integrity and technical excellence of the Halo film.  ... And that Executive Producer's name is Peter Jackson. ... Yes. The Peter Jackson, Executive Producing the Halo film."

Jackson will shepherd the highly-anticipated project and he'll also offer the services of WETA, his digital effects house and workshop, to the likely effects-heavy production.

A team from Bungie will visit Jackson and crew in New Zealand next week to begin discussing their plans for the Halo movie.

We'll be tracking this project and will keep you posted on new developments! 

Producer Peter Jackson – he of "King Kong" and "Lord of the Rings" fame – told the site that "Hellboy" director Guillermo del Toro is someone he’s in talks with right now to take the reigns on "Halo."

If del Toro signs on to direct "Halo," the site suggests that someone else might have to come onboard to direct the upcoming "Hellboy 2" – the first draft has just been handed into Sony, they said – because the big man won’t have time to do it.

The movie, based on a 2001 game, is a complex mix of mythology, characters and worlds and follows the adventures of futuristic super-soldier Master Chief as he fights to save mankind from an alien race."

Empire Online reports that the rumors are true - Halo executive producer Peter Jackson (King Kong, "The Lord of the Rings" trilogy) has approached Hellboy director Guillermo del Toro about taking on the video game adaptation. Unless Halo can wait, however, it looks more like del Toro will be doing Hellboy 2 instead. He talked a bit about the sequel.

"It's going really good," said del Toro, who's completed a script. "It's about the fairy world and the mythical creatures all rebelling against humanity and saying it's the end of mankind and it's the season for the sons of the Earth. And basically Hellboy has to try to repress or suppress that rebellion."

The magazine says Ron Perlman, Selma Blair, Doug Jones, David Hyde-Pierce and Rupert Evans are all coming back, while "Hellboy" creator Mike Mignola is also on board. "He should be reading the screenplay right now," laughed Guillermo.

However, Hellboy 2 is still awaiting the big greenlight before filming can take place. "We're budgeting," del Toro added. "I'm very much looking forward to it. I wanna do it. It's still on the front burner, but it's all about budget."

In the back of Guillermo's mind is the Halo big screen adaptation. "'Halo' is very much an interesting project because it’s so full of monsters. It's a big temptation. I'm in talks with them [Universal and Bungie Films] and Peter, but it's not true that it's on and Hellboy's off. Hellboy's on. If everything goes as planned, Hellboy will go."

If Hellboy 2 happens, it's possible Halo could go to another director. "The ideal for me would be to do 'Hellboy 2' and if 'Halo' doesn't go away, then yeah, I'd love to do both. But it may go to somebody else. We'll see."

n a shocking development, Fox and Universal, the two studios teaming up to co-finance the big-screen adaptation of HALO, have abruptly pulled out of the production. There was no official word from the studios as rumors raged from a budget soaring well north of the originally agreed upon $135 million, concerns over first-time director Neill Blomkamp and disputes over profit participation. At the center was an October 15th deadline at which point Fox and Universal were to pay Microsoft the bulk of $5 million for rights to the script. For likely numerous reasons, the two studios confronted Microsoft and Peter Jackson and asked them to reduce their profit participation (Microsoft alone was scheduled to receive 10% of gross). According to Jackson's rep, he and Microsoft respectfully declined leading to the exit of the studios. Normally the movie would put a project like HALO in significant peril, but because pre-production is being done at Jackson's Weta Workshop, work will continue. Microsoft is currently looking for new partners and is reportedly also in talks with other production partners (numerous studios passed on HALO during its original offering). Stay tuned as more on this story develops...

"Halo" franchise creator Bungie posted an official statement from Microsoft about the news that Universal Pictures and 20th Century Fox have backed out of co-financing the big screen adaptation:

"We are disappointed that Universal and Fox wanted to significantly renegotiate the financial points of the deal. But the Halo franchise is hugely popular and our goal remains the same - to find a partner that shares our passion and will creatively collaborate with us to best represent the story and spirit of the Halo franchise. Peter Jackson, Fran Walsh and the rest of the creative team are dedicated to ensuring the Halo movie becomes a reality. We are already in discussions with potential partners who recognize the value of the Halo brand and its appeal to consumers worldwide."

Bungie adds that at the company there "is a feeling of optimism, satisfaction and happiness for reasons we can't go into. Frankly we're interested in making the best movie, and it's possible that a partner who's more concerned with numbers, might not be the best partner for what's more vitally a creative process. Suffice it to say that Peter, Neill, Fran and Microsoft are as excited and dedicated as ever and WETA continues the pre-production process. Actually, when you do finally get to see the stuff WETA has already made, you will probably pee a little."

Actually, when you do finally get to see the stuff WETA has already made, you will probably pee a little."

Now that both Universal Pictures and 20th Century Fox have backed out of financing Halo, producers and Microsoft have concentrated their efforts this week on Warner Bros. and Paramount, reports Variety.

Sony, whose PlayStation is a direct competitor to Microsoft's Xbox, was never a possibility; Microsoft's rivalry with Apple made Disney a difficult fit, because Apple CEO Steve Jobs is the company's largest individual shareholder and a Disney board member. And New Line is still engaged in a dispute with Halo producers Peter Jackson and Fran Walsh over "The Lord of the Rings" proceeds.

Warner Bros. and its financing partners are coming off a tough year, and they've so far balked at the deal terms proposed by the Halo, team, adds the trade.

The Universal/Fox deal gave the movie a $128 million budget. Microsoft and the producers would have received 19% of the gross.

Prep work continues at Jackson's Weta studios in New Zealand. An Alex Garland script, already rewritten by Ender's Game scribe D.B Weiss, will get another rewrite by A History of Violence scribe Josh Olson.

After Universal Pictures and 20th Century Fox backed out of co-financing the Halo movie, it was reported that prep work would continue at Jackson's Weta studios in New Zealand. But now, Jackson and Microsoft's WingNut Films has released the following statement saying that production has halted:

As was previously confirmed, we deeply regret that both Universal and Fox did not choose to move forward with financing the Halo film under the original terms of the agreement. At this time Peter Jackson and Fran Walsh, along with their partner, Microsoft, have mutually agreed to postpone making a feature film based on the Halo video game universe until we can fulfill the promise we made to millions of Halo fans throughout the world that we would settle for no less than bringing a first class film to the big screen. We are fully supportive of Director Neill Blomkamp's vision of the film. Neill is a tremendously gifted filmmaker and his preliminary work on Halo is truly awe-inspiring. While it will undoubtedly take a little longer for Halo to reach the big screen, we are confident that the final feature film will be well worth the wait.

The script, originally written by Alex Garland and rewritten by D.B. Weiss, was to have gotten another rewrite by A History of Violence scribe Josh Olson. The movie was previously targeted for a summer 2008 release.

Creativity Online has posted a new interview with Neill Blomkamp who was set to the big screen Halo movie until everything went downhill last year. Here's a quote on the movie:

The film is entirely dead. In the configuration it was in. Whatever happens with that movie, assuming that movie gets made, will be a totally different configuration. It's not so much me as the entire vessel sank. Basically, it was a combination of; there were two studios involved that weren't getting along in the process of making it, Universal and Fox. That kind of stuff happens, it's a fragile industry. So the film collapsed at the end of last year, and it's been dead, ever since then. I'll be curious to see what happens.