reared its head in Hollywood today as Fox and Universal pulled out of the Xbox video game movie Halo after its budget rocketed to a rumored 200 million dollars.

A representative for executive producer Peter Jackson made a carefully worded denial of that number: "The only budget the filmmakers every spoke about was $145 million less the 12.5% rebate that you get from shooting in New Zealand, which would put it at about $128 million," Ken Kamins said. "That was the only number that was ever discussed.”

Fox and Universal obviously felt otherwise, and they had asked Jackson and Microsoft to help offset some costs by reduce their profit participation. No way, Jackson and Microsoft said, and the studios were gone.

Of course this doesn’t mean Halo is dead. Prep work continues, and first time director (!) Neill Blomkamp, one of the elements that made Universal and Fox worried (who can blame them?), is still on the project. And Kamins says that they’re already talking to other distribution partners.

Halo isn’t dead yet, but will it ever really get made? The studios pulling out may be a sign that Hollywood is figuring out that you just can’t make a decent profit on ludicrously priced movies. Will anyone want to get behind a possibly 200 million dollar unknown quantity directed by a newbie? I’ve been known to make some dumb bets in my time, but I can’t imagine putting my money on that one.