Jon Favreau has confirmed that he will not be directing Iron Man 3.  The helmer of the first two highly successful Iron Man films responded to a number of Web stories with the following post on Twitter: “It’s true, I’m directing Magic Kingdom, not Iron Man 3.  I had a great run with Marvel and wish them the best.”

New York Magazine’s Vulture blog broke the news citing both confusion about the storyline for Iron Man 3 and the high cost of bringing Favreau back for a third film with Old Shellhead as possible reasons why Favreau was ankling the project.  According to Vulture Favreau received $10 million for IM2 and would likely get between $12 and $15 million for IM3 along with gross profit participation.  With star Downey, Jr. already getting a substantial cut of the gross, the price of bringing Favreau back might well have just been too high.

In a recent interview with MTV, Favreau certainly didn’t appear to be all that happy with the way Marvel was shaping its movies with an overall continuity that apparently meant that Iron Man 3 would be a sequel of sorts to the Avengers movie: “In theory, Iron Man 3 is going to be a sequel or continuation of Thor, Hulk, Captain America, and Avengers. This whole world... I have no idea what it is. I don't think they do either, from conversations I've had with those guys.”

Although he won’t be helming Iron Man 3, Favreau will still be working with Marvel’s parent company Disney on Magic Kingdom, a film about a family trapped in Disneyland and their after hours adventures with various Disney characters and attractions. 

Meanwhile Disney’s Marvel Studios unit is focused on Thor and Captain America.  With Iron Man 3 slated to hit theaters May 13th, 2013, the studio has some time to come up with another director.  Whoever the studio wants, he or she will have to pass muster with Robert Downey, Jr., who has approval of the director written into his contract, and who is just about as hot as any actor in the world right now (with all the power that such status implies). 

There will also be considerable pressure from Disney to make sure that Marvel’s Avengers and Iron Man 3 movies are hits, since the Mouse House paid Paramount $115 million just to acquire the distribution rights to the two films (Marvel Studios had a distribution deal with Paramount in place before it was acquired by Disney).