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Thanks to the always lovely Ashley Archer I have been informed of this incredible news. Straight from the pages of Yahoo News:

Peter Jackson buddies with Microsoft for video game studio

LOS ANGELES (Hollywood Reporter) -
Peter Jackson is expanding his relationship with Microsoft Corp. by creating a video game studio and confirming two upcoming titles.

The Academy Award-winning filmmaker already serves as the executive producer for the upcoming “Halo” movie, based on Microsoft-owned Bungie Studio’s best-selling game franchise. Now he and screenwriter Fran Walsh have partnered with Microsoft Games Studio to create Wingnut Interactive Studio, a New Zealand-based firm that will develop new properties for Microsoft’s
Xbox 360 next-generation console.

Jackson, who recently picked first-time director Neill Blomkamp to direct the “Halo” movie for 20th Century Fox and Universal Pictures, will delve further into the sci-fi intellectual property through an original “Halo” game that will be separate from “Halo 3,” which Microsoft already has announced will ship next year for Xbox 360.

The as-yet-untitled game, which Jackson said has been in development for a year, is not expected to ship until 2008, after “Halo 3.” Bungie will develop the game with creative input, writing and direction done in cooperation with Wingnut Interactive.

Jackson and Walsh were on hand at Microsoft’s European X06 event in Barcelona, Spain, where the new collaboration was announced. The director said Microsoft has built “an amazing living canvas” with Xbox 360 and Xbox Live that allows storytellers to express themselves in a new medium.

“They have fundamentally changed how people think about games,” Jackson said. “My vision, together with Microsoft Game Studios, is to push the boundaries of game development and the future of interactive entertainment. From a moviemaker’s point of view, it is clear to me that the Xbox 360 platform is the stage where storytellers can work their craft in the same way they do today with movies and books but taking it further with interactivity.”

Jackson said the video game collaboration will allow his team to create a form of entertainment that audiences can watch and enjoy like a film, but with interactive elements. He added that technology is at a point where games and film can blend, and “the fun part” will be figuring out where they can blend and what that experience will be like.

While the “Halo” franchise was developed for hardcore gamers and became a crossover hit, the new take on the “Halo” universe will be built from the ground up for the mass market, he added.

“I think that intrinsically, most video games, and virtually all movies, do one basic thing: tell stories,” Jackson said. “The aspects and elements of an interactive experience are unique to the video game but not necessarily the way it’s perceived and/or understood as a story. You still have characters, plot, environments, dialogue or types of interactions, and this is standard fare.”

Scott Henson, Microsoft’s advanced technology group director, said that though Jackson is involved in the “Halo” film and the new game, the two are not tied together like the game Jackson directed for Ubisoft based on his 2005 film “King Kong.”

“Both the films and the games borrow from the ‘Halo’ universe,” Henson said. “What you’re going to see are creative elements that are shared throughout that.”

Jackson and Walsh are avid gamers, and Henson said that is critical to collaborations like these because the pair understands the interactive medium as well as linear entertainment.

For Jackson and Walsh, the collaboration allows them to take story ideas that may or may not be films and explore them through video games. Henson said the opportunity always exists for any original game properties that Wingnut creates to cross over to traditional media in the future, but that this is optional.

In addition to the “Halo” project, Wingnut will begin developing its first original intellectual property for Xbox 360. Henson said Microsoft will help Wingnut staff the studio and will share its technology with the team, after which it will serve as the publisher for new Wingnut Interactive games.

At the X06 event, Microsoft said that the external HD-DVD drive for Xbox 360 will ship for $200 in mid-November. The device will include “King Kong” on HD-DVD as well as an Xbox 360 universal remote control.

Microsoft also said its critically acclaimed Ensemble Studios, maker of “Age of Empires,” is developing a separate real-time strategy game for Xbox 360 titled “Halo Wars.” The game is not related to Jackson’s new “Halo” game or to “Halo 3.”

Reuters/Hollywood Reporter

How cool is this? Way to go Mr. Jackson

Clintus