'Halo' Lost?

Both Universal Pictures and 20th Century Fox have abruptly abandoned their planned feature adaptation of Microsoft's highly successful video game "Halo" reports Variety.

Both of the studios had previously agreed to co-finance the project which had an original proposed $145 million budget before tax rebates, but talk was rampant this week that the film would exceed that amount significantly. Not helping was that the first large upfront payday by the studios to Microsoft was due this week.

Reps for producer Peter Jackson deny the budget blowout claims. They say the backouts came when Universal, acting on behalf of both studios, asked the filmmakers to significantly reduce their deals in order to move forward with the film - an offer which Jackson, Microsoft and Bungee (the game designers) declined.

Microsoft is already in talks with other distribution partners, and prep work on the film continues.