Update: Favreau just confirmed his departure via his Twitter account. He wrote, “It’s true, I’m directing Magic Kingdom, not Iron Man 3. I’ve had a great run with Marvel and wish them the best.”

The world must be coming to an end because according to a report from Vulture Jon Favreau will not return to direct Iron Man 3. This can’t be a good sign. Favreau has championed the project for years and saw it through to the end, but the site claims that he handed in his resignation as director of the sequel this morning.

No official reason has been given as to why Favreau opted out of the film but sources say that he was frustrated with Marvel’s “urge to stuff more of their in-house heroes into the next film in the wake of The Avengers.” On the flip side, some industry insiders claim that Favreau’s budget was getting too big for the studio’s taste and that’s why they ended up butting heads. Vulture says that Marvel “quietly began the process of finding a director to replace Favreau last night.”

All reasons being thrown out regarding his departure are speculative. Nothing official has been said but we expect an official press statement to be released at some point to let us know what’s going on.

Both Iron Mans made a ridiculous amount of money for Paramount, so it would be shocking if they had an issue with Favreau’s budget. They’re almost guaranteed to make their money back on the sequel. The idea of Favreau being turned off by the studio’s decision to over stuff Iron Man 3 makes more sense. Let’s be honest, Iron Man 2 was nothing more than a big trailer for The Avengers. It was a means to an end.

What do you think about Favreau’s departure? Who could replace him?