Bungie’s Cancelled Game “Gypsum” Revealed
Cancelled Between "Halo 1 & 2"
During an interview with IGN called IGN Unfiltered, Bungie revealed a game that they were working on in between "Halo" and "Halo 2-" a game called "Gypsum."
From what was discussed, "Gypsum" was going to be a fantasy action-adventure game with a base in some form of mythology. This was being worked on alongside another cancelled project codenamed "Phoenix" until that was halted, with the team working on that joining those on "Gypsum."
The game was eventually cancelled when Microsoft wanted to focus effort onto a sequel for "Halo," which led the team being put onto "Halo 2." The rest is history, as "Halo 2" became a massive hit. Some elements from the cancelled "Gypsum" might have been used further down the line subtly in later "Halo" games or even popped up in "Destiny," where Bungie teamed up with Activision. Bungie could always return to the idea later in the future, but at the moment it seems their focus is on the "Destiny" franchise.
Source: IGN