The two studios cut their ties to "Halo" because of costs associated with the movie, which had a preliminary budget of $145 million, the Los Angeles Times reported.
The studios also failed to persuade the filmmakers to renegotiate their contracts, the newspaper said.
"We are disappointed that Universal wanted to significantly renegotiate the financial points of the deal," Microsoft said in a statement Friday. "We are already in discussions with potential partners who recognize the value of the 'Halo' brand."
Fox and Universal also had been in a power struggle over the movie's control, the Times said. The studios refused to comment.
The movie -- a large production replete with complicated special effects -- is scheduled for a summer 2008 release.