King Kong director Peter Jackson has agreed a deal with Microsoft to create what he describes as a "new form of interactive entertainment".
The Oscar-winning film-maker said he would be creating a series based on the Halo video game franchise, created by Bungie Studios.
"I'm getting a little bored with films," he said.
The series will appear on the Xbox 360 games console and Xbox Live, the machine's online service.
"We put the best platform in the hands of the best story-tellers"
Mr Jackson, who is also producing a movie based on Halo, said: "More and more I'm looking forward to the release of games and not movies. I am more aware and excited about games.
"I do not have to keep delivering stories as movies - there are other things I can do.
"Technology is at a point where we can blend a lot of film storytelling with interactive entertainment."
He added that the series would not be for hard-core gamers.
The surprise announcement was made at the X06 event in Barcelona, at which Microsoft unveiled its line-up of games for the coming 12 months.
Xbox boss Peter Moore also unveiled a HD-DVD, high definition player, for the console, which will be released in Europe in mid November, costing 199 euros (£129).
Microsoft also unveiled a further Halo spin-off, called Halo Wars, a real time strategy game based on the popular franchise to be made by Ensemble Studios.
Mr Jackson, who also directed the Lord of the Rings trilogy, will set up an interactive arm of his firm, Wingnut, and will work with Halo creators Bungie Studios to develop the series.
He admitted his team was at the start of the process and still had to "work out how to do it".
He added: "Gaming could be a form of entertainment that you could enjoy with the emotion of film, but you could also be interactive."
He said that he had chosen the Halo universe as the first series because it was an "amazing world".
"We put the best platform in the hands of the best story-tellers," said Mr Moore.
Peter Moore stressed that this did not mean that Mr Jackson was making Halo 4 or any sequels to Bungie's current game in development.
He also took the opportunity to take swipes at Sony's recent difficulties in launching the PlayStation 3 worldwide.
"We promised a worldwide launch and we delivered," he said.
Sony recently had to postpone the European launch of the PlayStation 3 due to production difficulties.
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