Why ‘Warcraft 2’ May Never Play in US Theaters

“I would suspect that the sequel would be more China-centric. It’s very possible it wouldn’t be released here,” one industry expert tells TheWrap

Normally, a movie with a $160 million production budget that makes $47 million at the domestic box office doesn’t get a sequel. But June’s “Warcraft” was not a normal movie, and its likely sequel won’t be, either.

In fact, it could be the first English-language movie from an American production company that will get a theatrical release in China and not the U.S. And as China’s box office continues to become more significant, “Warcraft 2” — or whatever the next installment is called — could provide a blueprint for other movies to follow.

Legendary Entertainment’s fantasy epic based on the “World of Warcraft” video game series starred American actors such as Paula Patton and Ben Foster. But the movie’s dominant international box office — it made $220.8 million in China and set a record for the biggest disparity between domestic and foreign receipts — means that “Warcraft 2” might draw its talent elsewhere. And given “Warcraft’s” weak performance at home, it may not even play in American theaters at all.

“Who says it needs to have American actors?” Sky Moore, a partner at Stroock & Stroock & Lavan who’s worked on several U.S.-China co-production deals, told TheWrap. “I would suspect that the sequel would be more China-centric. It’s very possible it wouldn’t be released here.”

“Warcraft” isn’t exclusively a China success story — the movie made $22.5 million in Russia and $15.7 million in Germany, two other strong video game markets — but the Chinese box office is basically why “Warcraft” even made sense as a movie. It hit a substantial $6.8 billion last year, meaning that movies that wouldn’t have made sense before might make sense now.

Warner Bros.’ 2013 sci-fi monster flick “Pacific Rim” made $111.9 million in China — $10 million more than it did in the U.S. — on a $190 million budget.

Even though Chinese theatrical splits are among the least favorable of any foreign territory — Hollywood studios only get 25 percent of the box office gross for revenue-sharing films, 34 of which are allowed in each year — the top-line number has grown large enough to where the Chinese market by itself can now swing the balance on whether a movie will be made or not.

And as China’s box office continues to grow — despite a summer slump this year, it could pass the U.S. as the world’s largest as soon as 2017 — Moore said that could lead to sequels of movies that connected a lot more with Chinese than American audiences being produced for that market.

“I’d expect more remakes in China of movies that did well there and not-so-well here,” Moore said. “It’s a big enough market.”

China has become a massive movie market, but it has a remarkable lack of diversity as far as the movies that actually do well there. Looking at the films that have earned more than $100 million at the Chinese box office, it’s basically fantasy, sci-fi, loud action movies and the Marvel Cinematic Universe.

“Warcraft” not only fits in with that theme, but it had some other China-specific advantages that made it a massive hit there and a flop at home.

The film’s production company, Legendary, was acquired by China’s Dalian Wanda Group in January, and Wanda — also China’s largest movie theater operator — helped put the film on a higher percentage of the country’s screens than “Furious 7,” China’s all-time highest-grossing Hollywood film.

Also, media and entertainment conglomerate Tencent, owner of China’s most popular social media app, WeChat, was one of the film’s marketing partners, and Tencent gave the film a massive marketing push, helping it fill theaters in third- and fourth-tier cities. In addition, China is estimated to be home to about half the world’s “World of Warcraft” players, giving the movie a built-in fanbase.

But just because a game is popular somewhere doesn’t necessarily mean that a movie version will automatically work. Terence Fung, the chief strategy officer of game company Storm8, said game and film fanboys (“Warcraft” had an overwhelmingly male audience) are not going to support a substandard branded product just because it’s affiliated with a game or comic book hero they love.

“Both the film and the game have to be true to the intellectual property,” he told TheWrap. “It has to make sense.”

What may make sense for Hollywood going forward is to think differently in distributing the type of big-budget, often poorly reviewed fantasy epics that the younger-skewing Chinese film audience can’t get enough of. It took $20 to see “Warcraft” in an American theater. It might take a passport and a plane ticket to China to see the follow-up.