Why Sequels Make Financial Sense for Hollywood
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If you’re ever felt a twinge of nostalgia for the films of yesteryear, you’re not alone. Hollywood discovered a new way to rake in the dough by tapping into our fondness for the familiar while aiming to captivate a new generation by rebooting and continuing some of its most iconic franchises.
From the ghost-chasing antics of “Ghostbusters” to the high-flying action of “Top Gun,” studios are blending classic appeal with fresh twists to both honor old favorites and attract fresh audiences.
But although the flicks are aiming to tug at our heart strings, the real purpose of these movies are dollar signs. Hollywood is banking on successful movies to provide big ROIs. Take a look.
In this article
Success stories
Sequels are nothing knew as movie studios hope to capitalize on stories fans loved. However, the new trend in sequels is reaching back decades to recreate movies that have become a part of pop culture. And it’s working.
Ghostbusters
Directed by Ivan Reitman and release in 1984, “Ghostbusters” became an instant cultural phenomenon. The film starred Bill Murray, Dan Aykroyd, Sigourney Weaver, Harold Ramis, and Rick Moranis, blending comedy, science fiction, and action in a way that was unique for its time.
With a modest budget of $30 million, “Ghostbusters” was a financial triumph, grossing approximately $296.6 million worldwide. Its success was propelled by its box office numbers and its impact on popular culture, spawning a dedicated fan base and influencing media from cartoons to comic books.
The success led to “Ghostbusters II” in 1989. Despite less favorable critical reception and lower financial performance, it still performed respectably, earning about $215 million globally. It also led to an animated TV series and video games.
In 2016, the franchise was rebooted with a female-led cast including Melissa McCarthy, Kristen Wiig, Kate McKinnon, and Leslie Jones. It received mixed reviews and sparked considerable online discourse regarding its casting. Financially, it grossed around $229 million worldwide against a budget of $144 million, which was a disappointment by industry standards
However, “Ghostbusters: Afterlife,” released in 2021, marked a return to the franchise’s original storyline, serving as a direct sequel to the earlier films. Directed by Jason Reitman, son of Ivan Reitman, the film sought to recapture the spirit of the original, blending nostalgia with new characters. The film was better received, both critically and commercially, earning over $204 million globally and leading to the 2024 release of “Ghostbusters: Frozen Empire,” which had earned over $201 million by the end of June.
Top Gun
Directed by Tony Scott and released in 1986, “Top Gun” quickly became an iconic film. Starring Tom Cruise as the charismatic pilot Pete “Maverick” Mitchell, the film achieved monumental success, grossing over $357 million worldwide after being made on a modest budget of $15 million.
Decades later, the long-anticipated sequel “Top Gun: Maverick” was released in 2022 with Cruise reprising his role. It received critical acclaim for its breathtaking flight sequences, updated storyline, and the emotional depth brought to its returning and new characters. The sequel, made with a much larger budget of $170 million was a massive box office hit, grossing over $1.4 billion globally.
Beverly Hills Cop
Starring Eddie Murphy as the witty and sharp-tongued Detroit detective Axel Foley, “Beverly Hills Cop” became a defining film of the 1980s. With a budget of just under $15 million, the film that melded action, comedy and crime to create a blockbuster formula grossed over $234 million globally, making it one of the highest-earning films of 1984.
The original film was followed by “Beverly Hills Cop II” in 1987 and “Beverly Hills Cop III” in 1994. The second film, while not as critically acclaimed as the first, was still a box office success, earning about $153 million. The third film, however, saw a decline in both critical reception and box office performance, grossing only $42 million.
The latest installment, “Beverly Hills Cop: Axel F,” premiered on Netflix in July 2024 with Murphy reprising his role. Made with a budget of $150 million, the film went straight to Netflix in an attempt to capture the new streaming audiences and did exactly as expected. Debuting as the most-watched Netflix title of the first week, 41 million people streamed the movie within its first seven days.
Twisters
Directed by Jan de Bont and released in 1996, "Twister" quickly became a significant entry in the disaster film genre. The movie starred Helen Hunt and Bill Paxton, following storm chasers attempting to deploy a research device into the heart of a tornado. With groundbreaking special effects for its time and an engaging storyline, "Twister" captivated audiences worldwide. Produced on a budget of $92 million, "Twister" was a massive financial success, grossing approximately $494 million globally. The film's impact extended beyond the box office, becoming a pop culture touchstone and influencing various media, including theme park attractions and video games.
Nearly three decades after the original, the highly anticipated sequel, "Twisters," stormed into theaters in 2024. Directed by Lee Isaac Chung and starring Glen Powell, the film built on the legacy of its predecessor while introducing new characters and advanced visual effects to appeal to contemporary audiences. "Twisters" proved to be a box office juggernaut, earning an impressive $81.25 million in its opening weekend, way more than the $50 to $55 million projections, and securing the third-biggest opening of the year. This success contributed to a total gross of $805 million globally, underscoring the enduring appeal of the "Twister" franchise and its ability to captivate new generations of moviegoers. Despite mixed reviews from critics, "Twisters" resonated with fans, blending thrilling storm sequences with emotional depth.
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Upcoming film sequels
As Hollywood delves into its treasure trove of classics, audiences can look forward to a slate of sequels that will blend nostalgia with new storytelling. Here are four highly anticipated sequels set to debut.
Shrek 5
The beloved “Shrek” series is set to return with its fifth installment, set to release in July 2026. Since its debut in 2001, the “Shrek” franchise has been a massive success, grossing over $1.6 billion across its four main films and generating additional revenue through spin-offs like “Puss in Boots.”
The upcoming “Shrek 5” will see the return of the original voice cast, including Mike Meyers as Shrek, Murphy as Donkey, and Cameron Diaz as Princess Fiona.
Gladiator 2
Released in 2000, “Gladiator” earned over $460 million worldwide and secured multiple Academy Awards, including Best Picture. As Russel Crowe died as the original gladiator, the announced sequel, to be released in November 2024, will focus on new characters under returning director Ridley Scott. Said to have begun with a $165 million budget, industry insiders say that number has spiked to $310 million. This means the film has to make around $800 million to break even and has become a big gamble for Hollywood.
Happy Gilmore 2
“Happy Gilmore,” released in 1996, became an instant comedy classic featuring Adam Sandler as an unconventional golfer with a hickey player’s temperament. The film was a moderate box office success, grossing over $41 million worldwide, but became a huge cultural success and solidified Sandler as a star.
After nearly 30 years, “Happy Gilmore 2” is set to bring Sandler back as Gilmore navigates the challenges of the golfing world years after his last championship wine. Sandler as a $250 million Netflix deal and has already produced eight movies for the streaming giant, with a reported 2 billion of streaming hours dedicated to Sandler’s films so Netflix is bound to win with this sequel.
Beetlejuice Beetlejuice
Tim Burton is reviving his 1988 horror-comedy classic with “Beetlejuice Beetlejuice” set to premiere in September 2024. The sequel will see the original cast members Michael Keaton as Beetlejuice, Winona Ryder as Lydia Deetz, and Catherine O’Hara as Delia Deetz, and introduce Jenna Ortega playing Lydia’s daughter, Astrid.
Produced on a budget of $15 million, the original “Beetlejuice” was a commercial success, grossing $74.7 million worldwide. Financials have not been revealed on the making of this next sequel, but its all-star cast and extremely popular original have insiders believing this will be a slam dunk for Warner Bros.
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A winning formula
Hollywood has discovered a winning formula for financial success by capitalizing on the nostalgia of yesteryear’s films.
Here's why you can expect to see more of these movies coming soon to a theater (or streaming service) near you:
- Built-in audience. Sequels capitalize on the existing fan bases of their predecessors. These fans are more likely to watch new releases, ensuring a strong opening at the box office. This reduces the risk and uncertainty associated with new and untested properties.
- Lower marketing costs. With established franchises, studios can spend less on marketing to raise awareness. The brand itself carries recognition and appeal, which can lead to substantial savings in promotional expenses.
- Merchandising opportunities. Sequels often come with the potential for extensive merchandising, which can include toys, apparel, and other branded products. This creates additional revenue streams beyond just ticket sales.
- Exploitation of new technologies and markets. Sequels allow studios to leverage new filmmaking technologies and expanded global markets that may not have been accessible or as developed during the time of the original film. This can attract a broader audience and generate higher global revenue.
- Streamlined production and development. Having established characters and a known universe can streamline both the creative process and production, potentially reducing costs and development time compared to starting a new project from scratch.
- Critical mass for additional spin-offs. Successful sequels can lead to spin-offs, prequels, and even multimedia expansions (like games or TV series), further capitalizing on the franchise’s popularity and creating a self-sustaining ecosystem of content.
These factors make sequels particularly attractive from a financial perspective, offering potentially high returns on investment while mitigating some of the risks inherent in the film industry.
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Writer
Lissa Poirot is an award-winning journalist and editor with a focus on finance, travel and health. Her work has appeared online and in print, and she has often been cited as a source on both. She currently resides in Pennsylvania.
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