High profile projects fall apart all the time. Most are due to money, others to studio politics, and others to creative differences with the principals involved. In the case of the now defunct film adaptation of best-selling video game series “Halo”, the real story was a mix of all of these things.

Excerpts from Jamie Russell’s new book “Generation Xbox: How Video Games Invaded Hollywood” have appeared on Wired.com in which various people involved in the former Fox/Universal co-production speak up about what happened.

Creative Artists Agency’s Larry Shapiro, who was handling the deal on behalf of Microsoft, says “Microsoft’s unwillingness to reduce their deal killed the deal. Their unwillingness to reduce their gross in the deal meant it got too top-heavy. That movie could have been Avatar.”

Neill Blomkamp, the “District 9” filmmaker attached to direct the project, agrees saying “When you have a corporation [Microsoft] 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.”

It wasn’t just the disagreements between Microsoft and Hollywood, but between the studios involved and the creative talent.

Blomkamp says “the suits weren’t happy with the direction I was going. Thing was, though, I’d played Halo and I play videogames. I’m that generation more than they are and I know that my version of Halo would have been insanely cool. It was more fresh and potentially could have made more money than just a generic, boring film – something like G.I. Joe or some crap like that, that Hollywood produces.”

He also admits “The way Fox dealt with me was not cool. Right from the beginning… until the end when it collapsed, they treated me like shit; they were just a crappy studio. I’ll never ever work with Fox ever again because of what happened to Halo”

Click here to check out the full and fascinating article.