Soul Searching Begins at Blumhouse After Cold Streak Capped by ‘M2GAN 2.0’: “Not the Sequel Audiences Wanted”

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Back in the early 2000s, I, a gamer at heart, found myself stepping out from under the shadow of Harvey Weinstein’s Miramax and venturing into independent production on my own. Those years were filled with an unrelenting fear that I might never make it alone. The ghost of failure lurked in every corner.

In that situation, he obtained a DVD of an inexpensive horror film named “Paranormal Activity”, which was made for under $15,000 by an unrecognized director called Oren Peli. Blum and others thought it had potential to be successful, so they sought a distributor. However, every attempt failed, but Blum persisted. Eventually, he managed to pique the interest of Steven Spielberg’s DreamWorks. Reportedly, Spielberg himself watched the movie and found it truly terrifying.

I’ve tried to keep the essence of your text while making it more conversational and easy to understand.

Initially, DreamWorks, along with its collaborator Paramount Pictures, premiered the movie in over a dozen university towns at the end of September 2009. As Halloween drew near, they expanded its release across the country. The film, titled Paranormal, eventually amassed $107.9 million in domestic earnings and an additional $194.2 million internationally, making it one of the most financially successful films in Hollywood. It also boosted Blumhouse’s label, paving the way for a new era of moderately-priced horror movies like Paranormal, Insidious, and The Purge, which spawned lucrative franchises.

Blum decided to establish his primary workspace at Universal, thanks to a profitable agreement that grants him artistic independence and the flexibility to collaborate with other production companies. Some of his significant achievements for Universal include rejuvenating the Halloween series, as well as delving back into his illustrious roots by producing award-winning films like Jordan Peele’s Get Out (2017) and Spike Lee’s BlacKkKlansman (2018).

Previously, Blum had put his fear of failure behind him, but a turn of events starting from 2024 has seen this apprehension resurface. This unfavorable trend, intensified in 2025, has been marked by all four of its 2025 releases failing at the box office. The disappointments began with “Wolf Man” ($34.1 million globally), followed by “The Woman in the Yard” ($23.3 million globally) and “Drop” ($28.6 million globally).

“The most astounding flop was undeniably M3GAN 2.0, which underperformed during its June 27-29 release and left Hollywood astonished, given that it’s a sequel to a massive success. Launched in January 2023, the original film M3GAN – featuring an AI doll that develops a life of its own with disastrous results – opened domestically to $30.4 million and went on to earn $181.7 million worldwide, all for just a $12 million budget.”

In a nutshell, the much-anticipated M3GAN 2.0, reportedly costing over $25 million in production alone prior to marketing, raked in only $10.2 million within U.S. borders and an additional $17 million internationally during its opening weekend.

As a devoted fan, I find myself reflecting on the exciting shift in direction for the M3GAN sequel. Director Gerard Johnstone, along with Blumhouse and Atomic Monster, led by James Wan, chose to transform this follow-up into a sci-fi action epic, with the doll taking center stage much like in “Terminator 2: Judgment Day”. Regrettably, the change of heart didn’t resonate with audiences, who seemed less than intrigued. Even industry experts and Hollywood insiders have expressed doubts about the timing of the sequel’s release, given the more competitive summer movie season.

Within Blumhouse, insiders are reportedly initiating introspective discussions to The Hollywood Reporter. They’re learning from this challenging year and reassessing their project lineup, considering whether a horror movie still qualifies as a cinematic spectacle in today’s market where such content is abundant. There’s also an acceptance that Blumhouse’s aim of releasing up to 10 films annually theatrically might be overly ambitious, given that the box office can no longer accommodate as many horror movies as it once could, especially smaller-scale productions. Crucially, there’s a need for adjustment in understanding what the Blumhouse horror brand represents today, with the main insight being that strategies successful in the past may not be effective in this evolving environment.

The company is currently planning for the upcoming releases: “The Black Phone 2” in October, a full-fledged horror movie, and “Five Nights at Freddy’s 2” in December, which seems to have been well-received by test audiences. The original “Freddy’s” was a significant success, earning an impressive $297.1 million worldwide against a production budget of $20 million (unadjusted for inflation), making it the highest-grossing film in Blumhouse’s history. Those in the know at both Blumhouse and Universal are optimistic that this movie will help revive the reputation of the studio founded by Blum.

One significant concern for Blumhouse is the upcoming spinoff of M3GAN 2.0 titled SOULM8TE, set to hit theaters on January 9, 2026. The movie revolves around an intelligent adult AI robot companion. At this point, it’s unclear if the film’s plans will alter, but industry insiders hint at ongoing discussions about the entire upcoming lineup, including SOULM8TE. However, they emphasize that the spinoff has shown exceptional test results.

During an interview over the weekend when M3GAN 2.0 was released, Blum himself chose to openly discuss both the movie and Blumhouse’s recent struggles with Matt Belloni from The Town podcast. He admitted to potential mistakes that could have led to these outcomes.

Blum stated that everyone believed Megan was similar to Superman, as we could modify her in various ways – switch genres, place her during summer, alter her appearance, and even transform her from a villain to a hero. However, he emphasized that the audience wasn’t yet prepared for genre-swapping, and he himself had been in constant discomfort over the weekend.

One horror production expert acquainted with Blumhouse’s operations concurred, expressing to THR that the film’s demise stemmed from overconfidence, or hubris. “They believed they were being innovative by altering release dates and genres,” they remarked. Another horror producer echoed this sentiment: “This wasn’t the sequel the audience desired; it was the movie the director wanted instead.

The positive takeaway is that there’s no panic at Universal regarding M3GAN 2.0 or Blumhouse’s recent dip, as their films are generally more budget-friendly than most studio productions. “We’d be discussing things differently if they weren’t accountable,” remarks a studio insider. In essence, each of these movies is expected to generate profits. To date, the 42 films released by Blumhouse since its inception in 2002 have amassed over $6 billion globally at the box office (not all are under Universal’s umbrella). The majority of these productions cost less than $20 million to make, with many falling well below that figure.

In this morning’s conversation with Blumhouse employees, I pointed out that no matter if it’s a movie star, production company, or studio, all successful talents experience periods of struggle. This observation also applies to Blumhouse, I added during my interview for The Town.

Paul Dergarabedian, Comscore’s chief box office analyst, points out that the summer box office is experiencing a congestion, affecting both family films competing with one another and genre releases like “28 Years Later” and “M3GAN 2.0.” He further explains, “The situation resembles a fierce competition among movies, much like a cinematic gladiator school or a bustling Dickensian marketplace, where success is celebrated by some, while failure brings hardship to others.”

—Borys Kit contributed to this story.

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2025-07-02 21:25