The studios were set to foot the $135 million bill for the feature-film adaptation of Microsoft’s popular Xbox game until earlier this week, when an initial payment was due.
The deal-breaking came after Fox and Universal tried a last-minute renegotiation with Microsoft and the filmmakers, attempting to get them to reduce their profit percentages. When Jackson, partner Fran Walsh, and the rest of the production team declined, the studios pulled out of the project.
Speaking to Variety, Jackon rep Ken Kamins explained, "What happened was this: Universal, on behalf of both studios, asked for a meeting with the filmmakers just prior to the due date of a significant payment. Basically, they said that in order to move forward with the film, the filmmakers had to significantly reduce their deals. They waited until the last minute to have this conversation. Peter and Fran, after speaking with their producing partners and with Microsoft and Bungee (the studio that designed the original game), respectfully declined."
Besides the filmmakers’ percentages, other potential points of studio trepidation centered on the film’s inexperienced director, Neill Blomkamp, and rumors that the $135 million budget could balloon to nearly $200 million.
Just last month, Jackson and Microsoft announced their plans to create a half-film, half-video game "Halo" experience for the Xbox in conjunction with the film’s release.
Meanwhile, pre-production on the planned 2008 release continues at Jackson’s Weta Digital and Weta Workshop visual effects shops, and Microsoft is shopping around for other distributors.