‘Halo’ pic’s a no-glow

Microsoft had taken in-house approach to vidgame adaptation

It may have conquered the software industry, but even Microsoft can’t crack one of Hollywood’s toughest nuts: making a good movie based on a videogame.

After years of critical and commercial duds like “Doom,” “Final Fantasy” and “Super Mario Bros.,” Microsoft took a new approach, aimed at protecting the value of its intellectual property, when it decided to produce a film based on ultra-successful vidgame franchise “Halo.”

Rather than striking a licensing deal with a studio, the tech giant in late 2004 tapped scribe Alex Garland and producer Peter Schelessel to develop a script in-house. In the summer of ’05, Microsoft’s reps at CAA approached studios with a package that included a finished script but kept strict creative control in the tech company’s hands.

Some studios balked at the terms, but Microsoft eventually reached a deal with Fox and Universal. Things looked even better early this year, when “Lord of the Rings” guru Peter Jackson and his partner Fran Walsh came on board to exec produce, with their f/x shop Weta Digital set to work on the film.

But that carefully designed package blew up in Microsoft’s face a few weeks ago when Fox and U, with an initial payment deadline looming, balked at the $128 million budget and 19 gross points the tech giant and Jackson had set up.

No other studio was willing to step up on those terms, so Microsoft and Jackson have gone back to the drawing board, hoping they’ll generate new interest after the “Halo 3” vidgame hits next year.

Meanwhile, the parade of independently financed, low-budget vidgame-based pics continued at AFM last week, where in-development films based on “Street Fighter” and “Castlevania” were on display.

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