Jackson, Microsoft get into character

Peter Jackson is setting his sights on the Xbox.

In a deal forged out of their relationship on the upcoming “Halo” movie, the “Lord of the Rings” helmer is teaming with Microsoft to create a new venture, Wingnut Interactive.

Company is committed to produce at least two projects for Microsoft that will include videogame and interactive media components. First will be a spinoff of “Halo,” which Jackson and partner Fran Walsh are exec producing.

Exact details haven’t yet been worked out, but Jackson is expected to write the “Halo” project along with Walsh and Philippa Boyens, the scripting team on “Rings” and “King Kong.” “Halo” developer Bungie, which is owned by Microsoft, will collaborate and likely do much of the technical work.

Microsoft is expected to fund production of both projects, which will be available exclusively on its Xbox 360 console and will utilize Xbox Live, the Internet service connected to the 360.

It’s not clear yet whether Wingnut Interactive will hire any of its own staffers and produce interactive media at Jackson’s home base in New Zealand.

Partnership was revealed at X06, a Microsoft videogame conference taking place in Barcelona. Helmer’s presence was kept secret, and his arrival at a press conference on Wednesday surprised journalists, who quickly spread the word online.

Speaking at the event, Jackson said the “Halo” project will be “not quite a game, not quite a film.”

Jackson is known to be particularly interested in videogames and was heavily involved in the vidgame adaptation of “King Kong.” According to his manager, Ken Kamins, the director spoke to numerous companies about a potential deal in the past few years and started working out terms with Microsoft earlier this year.

“The basic idea is to create a kind of interactive entertainment that’s not games as we know it,” explained Kamins. “Microsoft and Wingnut are going to attempt to figure out how to articulate that together.”

Deal is part of a broader strategy by Microsoft to expand its audience beyond the core gamer demo who make up most of the Xbox audience. Software giant decided to make a “Halo” movie, which Universal and Fox are co-financing, with the same goal in mind.

“We’re looking for Peter to help us create interactive entertainment that will expand our audience into the mainstream,” said Microsoft Game Studios general manager Shane Kim.

Company made several other announcements at X06 that should help it this holiday season and beyond as it faces significantly increased competition from two new consoles: Sony’s PlayStation 3 and the Nintendo Wii.

In a move that should boost studios using the format, Microsoft confirmed that the HD DVD drive attachment for the Xbox 360, which will be available later this year, will cost just $199. Pricing was expected and offers a significant advantage over standalone players, which cost $500 and up.

All versions of Sony’s PlayStation 3 will come with a Blu-ray high-def DVD player integrated. Since the PS3 will cost $200 more than an Xbox 360, cost for a console and high-def DVD player will be the same from both companies.

Microsoft also revealed that in addition to “Halo 3,” set for release next year, it’s working on a real-time strategy game based on “Halo” called “Halo Wars.” Ensemble Studios is developing the title, the first “Halo” game not produced by Bungie.

In addition, Microsoft announced that videogame publisher Rockstar will make additional game content tied to “Grand Theft Auto IV” available for download via Xbox Live within months of game’s release next October.

“GTA IV” will be the first installment of the series that’s not exclusively on PlayStation, a significant, and likely costly, victory for Microsoft in its battle against Sony.

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