MGM has announced that over the next few years, they will release half a dozen films in the $200 million budget range, one which will be a live-action version of The Hobbit.

MGM hopes to land Lord of the Rings director Peter Jackson to bring JRR Tolkien's other middle earth novel to the big screen. It is unknown if Jackson would return, at least this soon. Jackson told the BBC early last year that it will be up to four years before he would be willing to overtake the project (disclosure: this comment may have been made in light of the rights issues). But the good news is he's anxcious to return to middle earth:

"I keep asking about it, just out of interest, but they haven't sat down yet," Jackson told Rolling Stone in late 2005. "Hopefully someday the phone will ring -- "Hey, let's do The Hobbit" -- which I'd be perfectly happy to do."

The project was held up due to the ownership of the movie rights, which were split between two major film studios. New Line has the rights to produce the film, but MGM owns the distribution rights. The sale of MGM studios to Sony in 2005 caused even more frustration, as it looked like Time Warner (New Line's parent corporation) was going to be the buyer. That would have streamlined the project, as the rights would've been in the same corporate family.

Also of note, Jackson may not be able to take a producing role on the film due to his lawsuit against New Line.

Actor Ian McKellen hopes to reprise his role as Gandalf:

"I would love to do The Hobbit, yes. Partly because I would hate to see anybody else playing Gandalf," McKellen revealed in an CNN interview.

The Hobbit was first published on September 21, 1937. While it has a full story arc, it is often seen as a prelude or prequel to Tolkien's The Lord of the Rings series (published in 1954 and 1955). The story, subtitled There and Back Again, follows the adventures of the hobbit Bilbo Baggins as he travels across the lands of Middle-earth with a band of dwarves and a wizard named Gandalf on a quest to restore a dwarven kingdom and a great treasure stolen by the dragon, Smaug.