June 13, 2005

Microsoft Nears Movie Deal for ‘Halo’ Videogame

LOS ANGELES -- Microsoft Corp. was near a deal on Friday to sell the rights to make a movie based on hit video game series "Halo" after a recent round of Hollywood talks in which a high asking price and demands for creative input drew the ire of some parties, sources said.

The bidding for a movie based on "Halo" and "Halo 2," a science fiction series about a warrior named Master Chief who battles aliens, began on Monday when a script commissioned by Microsoft was delivered to Hollywood studios by messengers wearing Master Chief green armor and toting laser guns.

Represented by Creative Artists Agency, Microsoft sought an unusually high upfront payment of $10 million plus 15 percent of initial gross box office sales, which led several studios to drop out of talks, according to sources near the deal-making.

Universal Pictures and Twentieth Century Fox teamed up to make the winning offer that calls for an initial payment of $5 million plus 10 percent of initial box office receipts, sources said, although they cautioned that final details may change.

A formal announcement is likely next week after creative issues are hammered out between the studios and Microsoft.

Fox declined to comment and Universal said it did not discuss pending deals.

Microsoft spokesman Carlos de Leon would not confirm financial details nor would Creative Artists, but the deal is notable for several reasons.

Typically a Hollywood studio or producer might spot a hot game, comic, or story and buy the film rights. The studio or producer would hire a writer, then seek financial partners.

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In this case, however, Microsoft hired writer Alex Garland, who penned 2003 horror hit "28 Days Later," to dream up the story. Microsoft and CAA then sent their script to the studios and demanded to be part of the creative development.

"Microsoft is not in the business of making movies, and that is why we want to partner with the studios. (But) we have an obligation to make sure the 'Halo' franchise is protected and is something 'Halo' fans can be proud of," said de Leon.

He said that soon after the first "Halo" game became a hit in 2001, Microsoft was approached by Hollywood studios and producers wanting to snap up the movie rights, but the company was always mindful of maintaining some sort of creative input.

The "Halo" games have been huge hits for Microsoft's Xbox video game group. When released last fall, "Halo 2" sold 2.4 million units in its first day. Overall, the franchise has sold 13 million units worldwide, generating some $600 million in revenue, according to various industry sources.

Movies based on video games have turned in mixed results in Hollywood. The most successful was 2001's "Lara Croft: Tomb Raider" which raked in $275 million worldwide for Paramount Pictures, according to boxofficemojo.com

The sequel, "Lara Croft Tomb Raider: The Cradle of Life," was widely considered a flop in the U.S. and Canada with only $66 million in ticket sales, although it did prove more successful in the international market, with $91 million.


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