h3_e32006_storyboard01_chiefwalk.jpgBreaking: Variety is reporting Fox and Universal are pulling out of the adaptation of Bungie’s massively successful Xbox game. Citing rising costs and Microsofts unwillingness to back down on their cut of the gross or their upfront payday, the two studios are cutting financing, leaving the software giant to find a new partner.

Bungie themselves have been eerily silent about the movie. They promised a big update on their site around the time Neal Blomkamp was announced as director, but still haven’t said anything to even acknowledge that much. Weekly updates do continue to note when Bungie staff go to New Zealand to meet with WETA for pre-production. Executive Producer Peter Jackson seems more dedicated than ever, even starting work on his own Halo game for the Xbox 360.

Pre-production is rolling on according to reports, but no formal statement has been made from Microsoft or Bungie. The guiding light and motto for this whole production has been “make a GOOD Halo movie or make NO Halo movie” and I’m inclined to say it looks like the latter right now.

This does however make me thinkg Halo will miss 2007 and possibly 2008 for release. Hey Microsoft: Pay for it yourself! Then just hire a distributor! It worked for George Lucas.