Nintendo’s latest movie franchise made $50 million in profits

Gaming giant Nintendo stunned fans earlier this week when it announced that a sequel to its 2016 game Detective Pikachu would be released in October.

„Now here’s a surprise! Detective Pikachu is actually getting a sequel,” wrote One fan on Twitter, another Added „Don’t understand why it took 7 years.” There is actually a good reason for this.

Based on the eponymous character from the wildly popular Pokémon trading card series, Detective Pikachu stars a clever yellow squirrel-like creature who dresses up as Sherlock Holmes and solves crimes.

It is a spinoff of the Pokemon video games that have sold over 480 million copies and took the world by storm in 2016 when they came to mobile devices. Since then, Pokemon Go has been downloaded more than 600 million times and earned $4.7 billion for the Pokemon Company, which is part of Nintendo.

Detective Pikachu quickly became a cult favorite and in 2016 the film rights were licensed to Legendary Pictures, a subsidiary of Chinese conglomerate Wanda. Two years later, Detective Pikachu began filming and was released by Warner Bros. in 2019.

It was the first live-action Pokemon movie and the movie’s quirky premise made it a huge gamble. Thanks to Monsters vs. Aliens helmer Rob Letterman and a snappy script, sharp direction, and computer-generated imagery that makes Pokemon look solid and furry.

However, the biggest boost to its credibility was Hollywood giving a lister Ryan Reynolds the voice of Pikachu. His fast-paced comic performance captivated both adults and children and the plot engaged them both.

True to the game’s origins, the film centers around a mystery that Pikachu solves, and it has a buddy, Police Air, as pint-sized sleuth partner Tim Goodman, a reluctant Pokemon trainer played by Justice Smith. The two try to track down Goodman’s father’s disappearance in Rime City, which is where the game is set.

There are plenty of twists along the way, and at one point Pikachu blames himself for Goodman’s disappearance when he was part of Rhyme City’s founder Howard Clifford’s Machiavellian scheme. Oscar nominee Bill Nighy plays Clifford, lending the film’s gravitas, while London stands in for the Rhyme City.

Much of the film was produced at the historic Shepparton Studios, while several futuristic skyscrapers in London doubled for the film’s sci-fi landmarks. That’s not the only reason the film was shot there.

Making films in the UK enables studios to benefit from the country’s film tax relief scheme, which reimburses up to 25% of the money they spend there if the total cost of the film is at least 10%.

To prove this, studios usually set up new companies in the UK to make each film, and that puts a strain on their finances. That’s because companies must file publicly available financial statements that show everything from the number of employees, salaries and total expenses to the level of reimbursement they receive.

Companies usually have code names so that they don’t attract attention when they file for permits to film on location. Detective Pikachu is produced by Legendary Pictures’ subsidiary Gumshoe Productions for the private eye pokemon.

Its financial statements reveal that the film’s costs „were over budget, although this overspend was financed by the financier”. Expenditure totaled $203.4 million (£160 million), one of the largest single expenditures with $8.4 million (£6.6 million) spent on staff. They reached 169 in 2018, and that doesn’t even include freelancers and self-employed people who make up the majority of the workforce on a film shoot.

Major expenses include expenses for agencies such as equipment, travel and special effects companies. Two London-based businesses were behind the sophisticated CGI visuals at Detective Pikachu – MPC and Framestore, which worked on the Harry Potter series and Marvel’s latest blockbuster, Guardians of the Galaxy Vol. 3.

Legendary was reimbursed $34.1 million (£26.8 million) thanks to the Film Tax Relief Scheme, with net costs of $169.3 million for Detective Pikachu.

Blockbuster revenue comes from ticket sales. According to industry analyst Box Office Mojo, Detective Pikachu grossed $433 million, giving Legendary a net profit of about $47.2 million. The studio profits from the game promoting the movie, while Nintendo receives advertising for its game and pays licensing fees for the concession. An ad on a billboard can’t do that.

With this in mind, it’s easy to see why Nintendo recently announced a sequel to Detective Pikachu. This is a Report In March, Legendary hired Jonathan Grisel, co-creator of IFC sketch comedy series Portlandia and FX series Baskets, to direct Pokemon: Detective Pikachu 2. The original comedy should still go to Chris Galetta, who had scripting duties. He wrote the 2013 coming-of-age comedy, The Kings of Summer.

A writer’s strike will presumably reset the schedule, but the longer it takes, the higher the sales of the game sequel and the more publicity it will generate for the movie. Synergy with continuity isn’t the only reason Legendary has stayed on Detective Pikachu’s path.

A new wave of Pokemon mania is coming. A stop-motion animated series titled Pokémon Concierge is set to debut on NetflixNFLX later this year, and a live-action series for the streamer is also reportedly in early development.

After years of flops, video game adaptations are now a dream ticket in Hollywood. With $1.3 billion worldwide, The Super Mario Bros. is the highest-grossing movie of 2023 so far, while season one of The Last of Us recently became HBO Max’s most-watched show, averaging more than 30 million viewers per episode. Detective Pikachu 2 has to catch them all to create a Pokemon’s catchphrase.

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