After their dealings with Universal and Fox to work on the Halo movie fell through, Microsoft had no choice but to start looking elsewhere. According to Peter Jackson's representative Ken Kamins, they are already in talks with several other potential partners to help continue work on the movie.

Ken says that thanks to executive producers Peter Jackson and Fran Walsh, prep work on the movie has started back up. Weta Digital and Weta Workshop in New Zeland are handling most of the pre-production visual effects for the movie.

Rumors for Fox and Universal pulling out of the project were that they had concerns over the movie reaching to high of a budget. According to Ken, the breakup stems from disputes that occurred after Fox and Universal attempted to lower Microsoft's profit margin.

"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," explains Kamins.

"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 Bungie, respectfully declined."

Ken also had a few kind words to say about Neal Blomkamp, the creator behind the spectacular Halo shorts.

"Everybody is supremely confident in Neal," Kamins says. "Part of what excited Peter and Fran was Neal's vision. We're very confident this film will move forward with the creative partners intact, who will take the film to production."