Jason Blum, who ventured out on his own as an independent producer in the nascent 2000s following his departure from Harvey Weinstein's Miramax, was haunted by the specter of failure for years. He feared that he might never carve out a successful niche for himself in the competitive world of Hollywood. It was during this tumultuous period that he stumbled upon a DVD of a low-budget horror flick titled "Paranormal Activity," filmed for a meager $15,000 by an obscure director named Oren Peli. Seeing potential in the film, Blum and his associates believed it could be a breakthrough hit and embarked on a relentless quest to find a distributor. Despite countless doors slamming shut in their faces, Blum persisted, and eventually managed to pique the interest of none other than Steven Spielberg's DreamWorks. According to Hollywood folklore, Spielberg himself watched the movie and was utterly creeped out.
DreamWorks, in collaboration with its then-partner Paramount Pictures, initially released "Paranormal Activity" in a limited number of college towns in late September 2009, before expanding it nationwide as Halloween approached. The film went on to gross a staggering $107.9 million domestically and $194.2 million worldwide, cementing its status as one of Hollywood's most profitable ventures. It also propelled Blum's production company, Blumhouse, into the limelight and ushered in the Golden Age of micro-budget horror films, giving birth to multi-million dollar franchises such as "Paranormal Activity," "Insidious," and "The Purge."
Blum made Universal Pictures his home studio through a lucrative deal that granted him creative autonomy and the freedom to collaborate with other studios. Among his many triumphs at Universal, he revitalized the "Halloween" franchise and returned to his roots by producing Oscar-winning films like Jordan Peele's "Get Out" (2017) and Spike Lee's "BlacKkKlansman" (2018).
However, Blum's long-dormant fear of failure has resurfaced amidst a fortune reversal that began in 2024 and has persisted into this year. All four of Blumhouse's 2025 releases have flopped at the box office, starting with "Wolf Man" ($34.1 million globally), "The Woman in the Yard" ($23.3 million globally), and "Drop" ($28.6 million globally). But the most astonishing disappointment was "M3GAN 2.0," whose underwhelming performance over the June 27-29 weekend stunned Hollywood, considering it was a sequel to an unqualified success. Released in January 2023, the original "M3GAN" — about an AI doll that takes on a sinister life of its own — debuted with $30.4 million domestically en route to grossing $181.7 million globally against a budget of just $12 million.
"M3GAN 2.0," which cost at least $25 million to produce before marketing, opened to a paltry $10.2 million domestically and $17 million globally. So, what went wrong? Director Gerard Johnstone, Blumhouse, and partner Atomic Monster, helmed by James Wan, decided to steer the sequel in a different direction, transforming it into a sci-fi action film where the doll becomes the protagonist in the vein of "Terminator 2: Judgment Day." Audiences simply weren't interested in the about-face. Box office analysts and Hollywood insiders also questioned the wisdom of releasing the sequel during the highly competitive summer season.
Sources at Blumhouse confided in The Hollywood Reporter that a period of introspection had already commenced within the company. They are absorbing lessons from this challenging year and reassessing their slate through the lens of whether a horror film qualifies as a cinematic event in an era where the market for such fare is oversaturated. There's also an acknowledgment that Blumhouse's ambition to release up to 10 titles a year theatrically may be overly ambitious, with Blum concurring that the box office cannot sustain as many horror films as it once did, especially smaller ones. Most crucially, a course correction is imperative in terms of remembering what the Blumhouse horror brand stands for, with a pivotal takeaway being that what worked in the past may not necessarily resonate in today's evolving landscape.
The company is eagerly anticipating October's "Black Phone 2," an unadulterated horror flick, and December's "Five Nights at Freddy's 2," which reportedly received an enthusiastic reception from test audiences. The original "Freddy's" amassed an impressive $297.1 million globally, surpassing a $20 million budget to become Blumhouse's all-time top-earner, unadjusted for inflation. Both Blumhouse and Universal insiders harbor hopes that this sequel will restore the shine to Blum's cinematic empire.
A pressing concern for Blumhouse is the "M3GAN 2.0" spinoff, "SOULM8TE," slated for a January 9, 2026, theatrical release. This film delves into the tale of an adult AI robot companion. While it's premature to determine if the film's plans will undergo any alterations, insiders reveal ongoing discussions regarding the upcoming slate, including "SOULM8TE." Nevertheless, they affirm that the spinoff has tested exceptionally well.
In a podcast interview with Matt Belloni of "The Town" over the film's opening weekend, Blum himself took the initiative to address "M3GAN 2.0" and Blumhouse's recent decline. He candidly acknowledged what might have gone awry. "We perceived Megan as invincible, akin to Superman. We believed we could manipulate her genre, position her in summer releases, alter her appearance, and transform her from an antagonist to a protagonist. But we overlooked the profound engagement audiences had with her," Blum reflected, emphasizing that the audience wasn't prepared for a genre shift. (He also admitted to enduring a weekend filled with "pain.")
A horror producer well-versed with Blumhouse's internal workings echoed this sentiment, telling "THR" that the film's failure stemmed from hubris. "They erroneously assumed they could cleverly alter release dates and genres," the individual remarked. Another horror producer added, "This wasn't the sequel audiences craved; it was the director's vision."
The silver lining: Universal executives aren't panicking over "M3GAN 2.0" or Blumhouse's recent setback, given their modest budgets compared to most studio films. "Our discourse would differ if they weren't financially prudent," revealed a studio insider. "Ultimately, each of these films will turn a profit." Since its inception in 2002, Blumhouse's 42 releases have amassed over $6 billion worldwide, with the majority costing less than $20 million to produce, and often significantly less.
Blum reassured Blumhouse employees in his "The Town" interview, "I told them this morning that every prominent talent, whether movie stars, production companies, or studios, has faced setbacks. The same applies to Blumhouse."
Comscore's chief box office analyst, Paul Dergarabedian, asserts that no one is immune to the summer box office congestion, whether it's family films clashing or genre pictures like "28 Weeks Later" and "M3GAN 2.0." He further comments, "It resembles a cinematic gladiator school or a Dickensian marketplace, where some thrive while others struggle."
