Peter Jackson barely broke even on King Kong's $207 million budget and that was riding off the name of one of the greatest films ever created. Now, as popular as the Halo games are, I doubt they could draw in King Kong-calibur crowds. Lets say if all the two million (or so) people who bought the Halo game went out to see the Halo movie, it would only gross around $20 million assuming they paid $10 a ticket. In order to break even, they'd have to draw in a considerable amount of people who have never touched a controller in their life. Considering Gears of War costed Microsoft $10 million to fund, there is no way its a good idea to spend nearly 20 times as much as a top teir game for something that's really hit or miss.

Halo 3 isn't going to be the only new game this generation with bigger, more open environments. This is because the size of environments was one of the few gameplay elements that was restricted last generation due to hardware limitations. Granted, there were some games like GTA where you had a large area to explore, but they had to make some major graphical sacrifices as a result.