Over the weekend, Legendary Pictures' Warcraft opened in the United States with just over $24 million at the box office. For a summer blockbuster that cost an estimated $160 million to make, that's a flop any way you look at it; in fact, it made less in its opening weekend than recent summer flops Battleship, The Lone Ranger, even Fantastic Four.
But in China, Warcraft isn't just doing better than it did in the U.S.—it's breaking records. In five days, the film raked in $156 million, beating out last year's Furious 7 to become the country's highest-grossing opening for a foreign-produced film. To put that in the context of last year's undisputed global hit: in China, Warcraft made more in five days than Star Wars Episode VII: The Force Awakens did in its entire theatrical run ($124 million).
It may have lost the domestic battle, but WARCRAFT bombarded China with $156M in 5 days–the largest opening for a foreign film of all-time.
— Exhibitor Relations (@ERCboxoffice) June 12, 2016
It's increasingly common for big-budget movies to make a significant portion of its box-office total outside the United States. But most films that rake in hundreds of millions of dollars worldwide still tend to make between 50 to 70 percent of that total internationally. Warcraft is on pace to become (deep breath) the highest-grossing American-produced film with the lowest percentage of its box office total coming from the U.S. in the past decade. "This will go down as a record breaker in terms of disparity between the North American box office and China," says Jeff Bock, senior box office analyst at Exhibitor Relations Co. "It's never happened before. Not like this." Despite tepid reviews and dismal box office results most places, Warcraft's runaway success in China in all likelihood means a sequel, even multiple sequels. That's a bellwether for blockbuster film production and international distribution.
China's Box Office Juggernaut
Box office revenues in China grew by almost 50 percent in 2015, and have averaged 30 percent annual growth over the past five years. Revenues are growing so quickly that the Chinese box office may outgross its United States counterpart as soon as 2017.
However, China's State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) only allows 35 foreign films to open in the country each year. That strict quota, and the potential for censorship, means that not all major American blockbusters get a crack at the rapidly growing moviegoing public in China.
But Legendary Pictures has been making a bigger play to appeal to Chinese audiences for the better part of a decade. The company acquired the rights to Blizzard's Warcraft series in 2006, after its first film—Christopher Nolan's Batman Begins. The next film in that trilogy, The Dark Knight, featured an extended heist sequence shot in Hong Kong. Legendary also produced Pacific Rim, another blockbuster that didn't hit with American audiences (despite good reviews and a well-respected director) but made most of its money overseas. In fact, the company (which opened a wholly Chinese-owned subsidiary, Legendary East, in 2011) raised the $160 million budget for Warcraft by selling equity stakes to investors like the state-run China Film Group and media conglomerate Tencent.
That decision perhaps did more than anything to ensure the Chinese success of Warcraft: companies' financial investment in the movie motivated a large-scale marketing campaign that was unprecedented for a foreign-produced film. It also influenced the distribution, which Bock says was more widespread that a typical American blockbuster: "A lot of major North America films cater to the metropolitan areas, and not necessarily the smaller markets. But Warcraft filtered into markets that only local films usually have access to, because of the heavy promotion from major corporations within China."
Domestic Failure Is An Option
All of Legendary's forays into the Chinese film market culminated in the company's acquisition earlier this year by Chinese conglomerate Dalian Wanda, which also owns the largest theater chain in the country. China currently has more 35,000 screens, and Wanda Cinema's President stated earlier this week that the number could rise to as many as 80,000. That's a handy bit of synergy in the making—if also the kind of potential monopoly that the United States broke up in the landmark 1948 antitrust case against Paramount Pictures, which led to the demise of the classic Hollywood studio system.
But should Wanda Group continue to control both production and distribution of some movies, then Warcraft could be the first example of a new production behemoth that rivals the Disney/Lucasfilm/Marvel franchise machine. Two of the 10 highest-grossing films worldwide so far in 2016, The Mermaid and Monster Hunt, are Chinese productions that barely received distribution in the United States. If it passes Angry Birds and lands in the global top 10, perhaps Warcraft should count as the third.
For now, Warcraft is an exception, but it also may be a turning point. Should things continue in this vein, it's not inconceivable for the U.S. box office to become an also-ran for mega-budget productions. "There's a distinct possibility that Warcraft 2 goes into production, is fully financed in China, and does not get a major North American release," Bock says. After all, with nearly 800 million moviegoers, it's the biggest game in town—even bigger than World of Warcraft itself.