Update: The source article cited by 1UP is outdated and concerns the studios' now dashed prospects at the time the Halo film was originally canned. Joystiq regrets the error.

The Halo film is not "entirely dead" as director Neill Blomkamp said earlier this month. In fact, preparation for the movie continues at Peter Jackson's WETA Studios while Microsoft pursues new distribution partners, according to a report in Variety (via 1UP).

Concerning the previous deal that went sour, Ken Kamins, a representative for Jackson and partner Fran Walsh, told Variety that Universal had a meeting on behalf of both studios with the filmmakers just prior to a significant payment due date.

"Basically, [the studios] said that in order to move forward with the film, the filmmakers had to significantly reduce their deals," said Kamins. "They waited until the last minute to have this conversation. Peter and Fran, after speaking with their producing partners and with Microsoft and Bungie, respectfully declined."

"We're very confident this film will move forward with the creative partners intact, who will take the film to production," said Kamins, who also noted that everyone involved is still confident with Blomkamp as the director.