Microsoft Signs 'Rings' Director for 'Halo'

Microsoft(MSFT Quote) is teaming up with a popular movie director to develop a series of new games for the Xbox 360 and Xbox live.

Peter Jackson, the creator of Lord of the Rings and King Kong, will work with Microsoft to develop the next versions of Halo, a popular adventure game, the software giant announced Wednesday. Jackson and Microsoft will also develop a second series of games with new characters, plots and settings, but the company did not release any other details.

Microsoft did not give a time frame for either series, a spokesman saying only that both are in the early stages of development.

Bringing Jackson into the Microsoft fold is significant because the three major makers of consoles -- Sony(SNE Quote), Nintendo(NTDOY Quote) and Microsoft -- are vying to present games that will convince customers to buy their expensive hardware.

Microsoft still loses money on every console it sells, but Robbie Bach, who heads the company's Entertainment and Devices Division, said last summer that he expects the Xbox 360 to reach profitability in 2007. Indeed, the entire division, also a major money loser, is headed for "sustained profitability," he said.