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Wed Aug 24, 2005 4:50 PM ET

SAN FRANCISCO (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) has signed a deal with two film studios to make a movie based on its popular space-based video game series "Halo," a spokesman for Universal Pictures said on Wednesday.
Universal and Twentieth Century Fox agreed to pay Microsoft $5 million plus a percentage of ticket sales. The total price being paid is capped at 10 percent of the domestic box office.
The deal ends months of speculation over which studio would win the right to make a "Halo" film, which came to Hollywood last spring highly-touted by Microsoft and its representatives at Creative Artists Agency. Messengers delivered a script to the studios wearing costumes and toting laser guns.
But several studios balked at an initially high asking price, which at the time published reports pegged at $15 million plus 15 percent of the initial gross box office.
Under terms of the final agreement, Universal will oversee the film's production and domestic distribution, while Fox will handle international distribution.
Universal spokesman Paul Pflug said the studios are aiming for a summer 2007 release of a movie based on "Halo" and "Halo 2," a science fiction series about an alien-fighting warrior named Master Chief.
Microsoft spokesman Carlos de Leon declined to comment on the terms of the movie deal as well as on speculation that the software giant would launch its "Halo 3" game title alongside the movie.
"We haven't made any announcement on the launch of 'Halo 3'," he said.