New book details the development hell that killed the Halo movie

It's been nearly five years since the Peter Jackson-produced big-screen adaptation of the massively popular videogame franchise Halo breathed its last. It could have been the biggest movie ever, bigger even that James Cameron's Avatar, so why did it die? According to a new book on videogames in Hollywood, if you want somewhere to lay the blame, the only place to turn is Halo's owner, Microsoft.

In the book Generation Xbox: How Video Games Invaded Hollywood, Jamie Shapiro breaks down Halo's adventures in Hollywood from the dramatic beginning to the bitter end, starting with the grand gesture Microsoft made to studios when the development process started back in the summer of 2005.

By 2005, the Halo franchise had sold more than 13 million game units and grossed more than $600 million. It was a powerhouse, and Microsoft knew that if they played their cards right their multimillion-dollar game franchise could easily become a multimillion (or billion)-dollar movie franchise. But they wanted things done their way. They wanted to set up an unprecedented amount of control in theHalo development process, and they wanted the story to be theirs.

To that end, Microsoft paid 28 Days Later screenwriter Alex Garland to pen a Halo script to their specifications, heavy on the game's mythology and extra-heavy on the supervision of Microsoft bigwigs. With the script complete, Microsoft began their dealmaking process through the massive Creative Arts Agency. On the CAA side, the effort was led by agent Larry Shapiro, who remembers an immediate disconnect between what Microsoft wanted and what Hollywood was used to dealing with.

"To sell a movie into a studio and actually get it made is a lot of work. It takes a lot of conversations and a lot of pixie dust being thrown about while you're getting the deals done," Shapiro said. "In the games industry, they're technologists and they're data-driven. They're looking at data points and saying: 'We need the movie to be made, it's got to be this, this and this. If you get A, B and C to be part of the movie, then great, we'll sell you the rights.' You can't do that."

But this was Microsoft, and this was Halo, and so CAA was willing to do it their way. To help make the software giant's point, Shapiro commissioned a series of Master Chief suits of Spartan armor, hired character actors to wear them and then had the Master Chiefs hand-deliver a copy of Garland's script and Microsoft's terms to each of the major studios in contention for the Halo movie. The only major studio that didn't get the offer was Columbia Pictures, which is owned by Microsoft's gaming console rival, Sony.

Each studio was given only a matter of hours to read the script and the terms and then make an offer on the film, but the terms were so steep that most of the studios almost immediately passed. Microsoft wanted to earn $10 million plus 15 percent of the film's eventual gross. They wanted a "below-the-line" (meaning, physical production cost before marketing and distribution) budget of at least $75 million for Halo, and they wanted the production fast-tracked. But the demands didn't stop there. They wanted the studio that picked up the film to give them full approval on the cast and director, they wanted a Microsoft rep to be flown from Seattle to California (on the studio's dime) to view and approve every single cut of the film, and they wanted 60 first-class plane tickets for members of their staff to fly out for the eventual world premiere.

And Microsoft, for all its billions, was only willing to pay $1 million of their own cash toward this effort: The money they'd already dished out to get the script written.

By the end of this hefty display of gaming giant power, only two studios were left standing: Universal and Fox. Together, the studios undercut Microsoft's massive demands by agreeing to partner on the project. Universal would take domestic rights and Fox would take foreign, they would co-produce, and with all the other studios out of the picture Microsoft would have no choice but to fall in line.

"What happened was Universal called Fox and asked them what they were going to offer," Shapiro said."They decided to partner on it. 'Let's offer the same deal and offer to partner'. So now we lost our leverage."

Things didn't work out quite the way Microsoft planned with the dealmaking process, but the deal was made, and now it was time to make the film. Microsoft wanted a big-name director, and they were pleased when Peter Jackson expressed interest in the project. In the end, though, Jackson only wanted to co-produce Halo. To direct, he had in mind his protege Neill Blomkamp, who would later go on to make the acclaimed sci-fi film District 9.

Blomkamp was thrilled at the prospect of adapting one of his favorite videogame franchises for the big screen, and the studios liked the idea at first because it meant they could save a little money by hiring a young director (Jackson was already getting a rather hefty producing fee, adding to the film's costs). But things quickly turned sour where Blomkamp was concerned. Three different corporations (Universal, Fox and Microsoft) had their hands in the property, and power struggles were inevitable.

"The way Fox dealt with me was not cool," Blomkamp said. "Right from the beginning, when Mary [Parent, Universal's former president of production turned Halo producer] hired me up until the end when it collapsed, they treated me like s—; they were just a crappy studio. I'll never ever work with Fox ever again because of what happened to Halo—unless they pay me some ungodly amount of money and I have absolute f—ing control."

But production wore on. Universal funded an initial $12 million in preproduction costs to redraft the screenplay and allow Blomkamp to begin producing props through New Zealand-based Weta Workshop (the same company that produced all of the Lord of the Rings props for Jackson). Blomkamp even got as far as shooting some test footage, which wound up being recycled in 2007 to promote the release of Halo 3.

But Halo was never on solid ground. The development process was slower than any of the three corporate entities wanted, the budget was top-heavy, and by October 2006 Universal had had enough. Right before a big payment to Microsoft and the filmmakers, the studio demanded the producers cut their fees. Jackson consulted with his team, and with Microsoft and Halo developer Bungie, and said no. Jackson, Blomkamp and their entire production team walked away from the project, and Halo was dead.

So, what killed Halo? In the end, Microsoft's lavish demands combined with the film's swelling budget made it too expensive.

"One of the complicating factors with Halo was that Microsoft wasn't the normal party that you'd go off and option the IP from and make your product," Blomkamp said. "Because Microsoft is such an omnipresent, powerful corporation, they weren't just going to sit back and not take a massive cut of the profits. When you have a corporation that potent and that large taking a percentage of the profits, then you've got Peter Jackson taking a percentage of the profits and you start adding all of that stuff up, mixed with the fact that you have two studios sharing the profits, suddenly the return on the investment starts to decline so that it becomes not worth making. Ultimately, that's essentially what killed the film."

Someone somewhere, either in the gaming industry or the film industry or both, is still thinking about a Halo movie. It could still get made someday. Until then, it's just another entry in Tales from Hollywood Development Hell.

(Via Wired)

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