Movie sequels fall flat

Movie fans will find a host of familiar franchises on the big screen this year. This may not be enough to save the box office.

Newcomers from popular movie series will dominate the movie list in the next 12 months. The 2026 calendar includes releases from Star Wars, Marvel, DC Comics, Toy Story, Super Mario Bros., Hunger Games, Scream, Scary Movie, Minions, Dune and Jumanji.

Intellectual property like these established franchises has long been an important part of Hollywood, but it’s becoming increasingly vital in 2026 as the theatrical industry seeks to cross the $10 billion mark at the domestic box office for the first time since the pandemic.

But some big-name films aren’t drawing crowds anymore than before, and industry insiders worry the $10 billion threshold may be out of reach this year for a post-pandemic industry that has been reeling from production shutdowns, consolidation of big studios and a shift in consumer views toward streaming.

“The use of franchises has been a little trickier in recent years,” said Alicia Reese, senior vice president of equity research at Wedbush. “Yes, there is a certain level of certainty…but it’s not a home run. It’ll never be a home run from now on, because people are pickier than before. They know what’s coming. Word of mouth matters more than ever.”

Since 2010, the 10 highest-grossing films domestically have been predominantly franchise films, according to Comscore data. During this period, between eight and ten films released each year were a sequel, prequel, or remake. The only exception was 2020, when seven of the top 10 films were based on a franchise, due to the number of films delayed during Covid shutdowns.

And, of course, a number of original titles that made the top 10 have themselves become franchises over the past two decades. Watch “Avatar,” “Frozen,” “Zootopia,” “Inside Out,” “The Secret Life of Pets,” and “Ted.”

“Studios clearly feel that audience comfort — going to see a movie where, in some sense, they already know what they’re going to see before they walk into the auditorium — is a gamble worth making,” said Paul Dergarabedian, Comscore’s head of market trends.

As studios rely on the security of a built-in audience, box office sales become more dependent on the success of these franchise films.

Before the pandemic, between 2010 and 2019, the top 10 films averaged 30% of the total domestic box office each year. The 2019 calendar topped the group, where these films accounted for almost 40% of the annual haul. All ten films that year were IP-based, and nine of them grossed over $1 billion worldwide.

Post-pandemic, the average percentage that the top 10 films represent of the total annual domestic box office is 44%.

“I remember having this conversation in the late ’90s,” said Eric Handler, managing director and senior research analyst at Roth Capital Partners. “For the last few decades, the box office has been franchise-driven. That’s the way it is. Why? It’s because when you’re familiar with the content, people are more likely to show up because there’s an affinity for a particular franchise and it’s already known.”

Today, Hollywood is faced with the harsh reality of what happens when franchises collapse.

Two of the most anticipated films in theaters last year: Universal’s “Wicked: For Good” and Disney “Avatar: Fire and Ash” — did not meet expectations.

The first “Wicked” film, released in 2024, grossed $475 million at the domestic box office and just over $750 million worldwide during its theatrical release. A year later, the second part of the duology collected just under $350 million from the United States and Canada and approximately $525 million worldwide.

Box office analysts attributed the decline in ticket sales to a drop in quality between the first and second installments. “Wicked” generated an 88% “Fresh” rating on review aggregator Rotten Tomatoes, while “Wicked: For Good” earned a 66% rating.

“Avatar: Fire and Ash” had even bigger shoes to fill. James Cameron’s hit “Avatar,” released in 2009, grossed $785.2 million domestically and $2.1 billion internationally. It remains the highest-grossing film of all time at the box office with $2.9 billion in ticket revenue.

More than a decade later, “Avatar: The Way of Water” hit theaters, grossing $688.8 million domestically and $1.6 billion internationally, bringing its total to $2.3 billion.

But when “Fire and Ash” hit theaters in December, consumer demand wasn’t as high and the appeal of Cameron’s revolutionary filmmaking techniques had worn off. “Fire and Ash,” which is still playing in theaters, grossed just $378.5 million domestically and surpassed $1 billion internationally on Sunday.

Wedbush’s Reese said part of the problem may be due to trying to exploit too much of a single franchise.

Take, for example, Disney’s Marvel Cinematic Universe. The film franchise has been a box office darling for nearly two decades, but has struggled to produce sequels of consistent quality following the climactic “Avengers: Endgame” in 2019. At the same time, it has flooded the streaming market with a dozen new TV series.

“If you try to stretch it too much and don’t pay the same level of attention to detail, it’s not going to work,” Reese said.

There is also a risk in trying to expand a niche interest into global success, she said. Do the filmmakers stay close to the original license and play on its basis, or do they shoot for a wider audience and greater impact?

Reese noted Warner Bros.’ The new Dune franchise, starring Timothée Chalamet and directed by Denis Villeneuve, is a good example of a series that threaded the needle, landing with fans who already loved the books at the same time as it attracted new crowds.

“If it’s a good movie, it will speak to that target audience and it might attract newbies and have broader appeal,” Reese said. “But if you try to get that much attention and you don’t meet the needs of your core fans, they’ll turn against you. That will cause huge problems, because if they don’t like the movie, everyone will find out, and they won’t go either, right?”

Since Covid shutdowns virtually decimated the film industry in early 2020, the number of films produced for theatrical release has declined.

As studios produce fewer films, they rely even more on what they perceive as the safe bet of proven intellectual property.

In 2024, 94 films were released in more than 2,000 locations, a 20% drop from the 120 wide releases in 2019. This drop was reflected in box office results, which were down about 23% from the $11.4 billion in 2019.

In 2025, 112 films were released widely, down about 6.6% from 2019 levels, but the box office still lags by more than 20%.

Hollywood analysts point to several factors as to why the domestic box office continues to lag.

There is a lack of cinematic content, especially for mid-budget films – between $15 million and $90 million. Most of these films, which are typically dramas, comedies, romantic comedies and thrillers, have moved to streaming because they are cheaper to make and help fill digital libraries with new content.

At the same time, consumers have become more discerning about what they watch and the home entertainment space has advanced such that home technology makes staying on the couch easier.

For this reason, studios and theater owners began to “eventize” film releases – promoting films as must-sees in high-end large format theaters like IMAX, Dolby Cinema, Screen X or 4DX; sell specialty merchandise like buckets of popcorn and sip drinks as well as limited-time food options; and organizing events associated with a film release, such as making a friendship bracelet for the Taylor Swift concert film release.

Often the easiest films to promote in this way are those based on well-known franchises.

Last year, when “Downton Abbey: The Grand Finale” hit theaters, Alamo Drafthouse hosted costume screenings, encouraging moviegoers to arrive in period attire. The event included a costume contest as well as themed drinks and food. The theater chain has held similar events for screenings of James Bond and Star Wars films and will host one for the upcoming adaptation of “Wrongwind Heights.”

And these franchises don’t just appear in movie theaters. Many major movie studios also have their own consumer and experience products divisions, which rely on cinematic content not only to sell merchandise but also to fuel the design of theme parks, live events and even cruise ships.

Franchise fans crave products that celebrate and highlight their favorite movie characters or moments. This can manifest in the form of clothing, bedding, kitchenware and bumper stickers, all the way to collectibles, luxury watches, electronics and seasonal products like ornaments.

Disney has built theme park lands, rides and cruise ship elements based on Star Wars, Marvel, The Muppets, Pixar films like Cars, The Incredibles, Toy Story and Monsters Inc., as well as Disney animated properties like Frozen, Zootopia, Moana, The Lion King and The Little Mermaid.

Comcast Universal has also staffed its theme parks with its own properties – Jurassic Park, Minions, Secret Life of Pets, Dark Universe and How to Train Your Dragon – alongside licensed franchises like Wizarding World of Harry Potter and Nintendo.

And beloved, well-maintained franchises have power: The Star Wars franchise hasn’t landed a new theatrical release since 2019, but it has remained one of the top film franchises in the cultural zeitgeist, according to Fandom, the world’s largest platform for entertainment fans.

Disclosure: CNBC and Rotten Tomatoes are divisions of Versant Media.