The film is a casualty of the belt-tightening going on in Hollywood at the moment. EotW was being touted as a massive effects movie (probably in the $200m bracket) and for an unproven property that's just not now going to happen.

There's also the issue that at the moment fantasy is taking off on TV and WHEEL OF TIME would do better there, but Red Eagle desperately want to make a movie as they would make more money out of it, even if it's a failure (regardless of it not servicing the story as well). Fortunately, Red Eagle has no further legal involvement with the film/TV rights (which they sold in their totality to Universal in return for a producer's credit and probable wad of cash if it goes into development), so if Universal sells the rights on or moves them to another department, hopefully Red Eagle will have no further involvement with the project.

As for the game, Red Eagle and Obsidian entered into a deal in 2010 to make the game. However, Red Eagle had to raise the money to fund the project from a major publisher. So far they have failed to do so. My guess is that Red Eagle's insistence on being involved in the game's physical production rather than leaving it all to the far more experienced Obsidian is a sticking point. There's likely also money issues. Given that Obsidian have suffered financially from the game not going into development, I'm sure they're not happy about the situation either.

In summary, everything's on hold at the moment. And given that thanks to GAME OF THRONES's success, fantasy is suddenly hot again, it really shouldn't be. Red Eagle seem to have seriously messed up on handling the rights with both games and the film rights.