Courtesy of Box Office Mojo

Now let’s try to do some theory crafting about why these movies ended up there.

Genre Success

Avengers: Endgame, Avengers: Infinity War, The Avengers & Spider-Man: No Way Home are super hero movies. The most common and obvious explanation is that superhero movies have universal appeal. They are our modern mythology with simplistic stories of good and evil that have been with us since the dawn of civilisation. In other words, Greek (insert any other ancient culture here) gods reloaded. Such stories do well globally and have mass appeal as they are deeply engrained in our collective human history.

Another crucial factor for their success is China, which is the biggest movie market in the world. Being successful in China is mandatory to get into the top 10. The superhero genre appeals to the Chinese market as much as it does to Western audiences, which helps with their top 10 dominance.

It’s worth mentioning that there is an import quota of 20 Hollywood movies a year with the option to add up to 14 commercial films (3D or IMAX). I won’t veer off into politics at this point but every movie also needs to be approved by the Publicity Department of the Communist Party before getting approval to be released. This has lead to many an adjustment to movies, which seek commercial success there. Super hero movies are not controversial by nature and the bad guys are usually made up villains that don’t offend. Therefore, approval is easy!

A notable exception is Spider-Man: No Way Home, which was not allowed to release in China. It still made it into the top 10, which is an impressive feat. This success was likely due to it being the first Marvel movie on the big screen to serve the pent up demand that built up during global lockdowns.

Sorry but I have to take this tangent! The Chinese Publicity Department reportedly requested the removal of a long action-packed sequence in the third act of Spider-Man: No Way Home (this is the one on the Statue of Liberty). Sony (side side note - Spider-Man is the only Marvel hero for which Disney does not own the film rights) didn’t budge so the Chinese authorities instead asked for the removal of certain shots from the sequence that they deemed too “patriotic” (the scenes where Tom Holland’s Spider-Man stands on the Statue of Liberty’s crown). Sony rejected the request, resulting in not getting the approval to release the movie. The film lost a potential $170 million-$340 million in sales from China, according to reports. The previous 2 Spider-Man movies released there respectively earned $120 and $205 million (or 13% and 18% of their global gross). Makes you think about how much the script writing process is influenced by seeking this approval.

I would lump Avatar, Avatar: The Way of Water, Star Wars: Episode VII - The Force Awakens into this super hero category as well. However, they add another distinct quality to the formula, which is that of family drama. There are of course family components in the other movies too but they do not play a central role to the narrative.

The Lion King (2019 release) contains globally accessible family narratives and themes of good and evil. If one examines the expanded top 100 list, it becomes apparent that animated Disney movies as a genre do well. The success is to no small part due to a PG rating, which allows access to a much bigger audience, while the formula still keeps mass appeal with adults.

Let’s talk about Titanic. There is no other movie of the Romance Drama category anywhere in the top 100. There is also only one other Leonardo Di Caprio movie in the top 100 (Inception at 88). So the genre underperforms and Leo isn’t usually selling that many tickets globally. What else is afoot here? We are now getting to the uncomfortable truth about this whole list and most of the expanded top 100 grossing movies. They are up there because of visual effects. Jurassic World can’t be explained any other way - well, other than having dinosaurs.

Jim Cameron’s Success

So how did Jim Cameron manage to end up with 3 of the top 5 most grossing movies globally (Titanic and 2x Avatar)? Clearly because of his talent and vision but also because with both projects he pushed film forward visually by using extraordinary SFX and VFX.

For clarification, special effects is abbreviated as SFX while visual effects is abbreviated as VFX. The crucial difference between the two is that the latter happens in post production, while the former is more about doing cool things on set.

Jim Cameron is the master of both SFX and VFX. For Titanic a budget of $40 million was spent alone on to building a mock full sized ship that could sink on the press of a button. The post production was impressive and set a new benchmark for VFX. For Avatar he created a new stereoscopic camera that both allowed for more freedom in the filming process and for capturing more depth of field. The post production of Avatar took years and again set a new standard for VFX. It also set the benchmark for 3D experience in movies and changed the motion capture game. The plot, on the other hand, was kinda meh.

Yes, I know my thesis is somewhat simplistic but the correlation between VFX and box office success seems undeniable. Maybe we are just that shallow! Then again that’s what the movies are about nowadays. Other less visually overstimulating genres are being consumed from the comfort of our couch at home. Banshees of Inisherin doesn’t require a big screen to enamour us with superb acting. However, there is a big qualitative difference in the enjoyment of a dopamine ridden Marvel movie on the big screen compared to my TV at home.

Jim gets that and he arguably saw this coming much sooner than anyone else. I doubted that he could pull off what he did with Titanic and Avatar with Avatar: The Way of Water. The first movie’s plot was Pocahontas in space with blue aliens. I watched it for the effects and because I’m a movie buff but I didn’t care much about the franchise. Hell, nobody did. There were no major games, toys, rides or fan fiction that followed even though he had announced it to be a trilogy. Compare that to Marvel that create meta narratives between movies, TV shows and comics to create a continuous pop cultural relevance loop. Avatar disappeared as fast as it emerged. It seemed positively insane to spend nearly $500 million on a sequel (making it the most expensive Hollywood movie) to a franchise that nobody cared about for 13 years. Yet he did it again.

Despite the reviews taking it apart for the new age jargon in its script, the insane 3+ hour length, the weird casting decision to include Sigourney Weaver as a child Na’vi and the predicable simplistic plot, I went to see it. Why? Because every review said it looked totally awesome! A new benchmark for animation quality and VFX! A movie made to watch in the theatre.

I am still surprised it did as well as it did. Then again Jim knows what he’s doing. The story is simple - no multiverses or plot twists. It’s a family drama with relatable blue aliens on a beautiful planet. The bad guy is one we love to hate. The appreciation for nature strikes a nerve in a world worried about climate change. It all feels quite universal. No rough edges that could get anyone upset or overly excited. Now it’s the 4th most successful movie of all time. Does anybody still talk about it or care? Not really. Does it matter? Nope.

Bonus: Zoe Saldana’s success

No real secret here. Zoe had the good fortune to get cast both in Avatar and Marvel’s Guardians of the the Galaxy. The Guardians are part of Avengers Infinity War and Endgame so she’s managed to star in 4 movies in the top 10. As a side note, the core cast of the Avengers (Robert Downey Jr., Chris Evans, Chris Hemsworth, Mark Ruffalo, Scarlett Johansson and Jeremy Renner) all star in 3 movies in the top 10 (Avengers Assemble, Avengers: Infinity War and Avengers: Endgame).

Closing Thoughts

The state of the franchise and VFX driven box office successes has fundamentally changed the movie industry. China’s recent rise as the largest movie market has played a key role. This is why a majority of the top 100 grossing movies globally are from the 2010s.

The top grossing category is merely a facet of the movie art from. I appreciate the artistic side of it much more but I don’t think this commercial element is destroying the movies. There are aspects of the commercial side that are problematic (censorship, etc) but widely successful movies create a shared experience between people that is much needed in the age of fractured societies.

Some directors miss the past. Self-referential nostalgia tales about the good old Hollywood days are becoming more popular: Damien Chazelle's Babylon, Steven Spielberg’s The Fabelmans, or Quentin Tarantino’s Once Upon a Time in Hollywood. Yes, the resulting loss of genre diversity due to box office hits movie making is regrettable. Diversity still exists, however, and arguably has increased given that technological progress has created cheaper means to make movies. Independent studios like A24 have made a name for themselves by picking niche low budget movies and making them commercially successful with innovative marketing. No, film is not dying, it is just adapting to the changes in culture and technology.

Nostalgia can be beautiful as long as it doesn’t paralyse. The future of content is going to be very weird very fast. Generative AI will soon conquer video as a medium and that will change everything. But I’m sure Jim will still have some aces up his sleeve!

THE CONSOLE LANDSCAPE
Microsoft is currently behind Sony in gaming console sales (for both the current and past generation) of Xbox which also means the overall revenue from their gaming unit is below Playstation’s. The biggest player in the world is actually Tencent, however they make most of their money in free to play mobile games, which is why we’ll ignore them for the purposes of this analysis.

A big part of Sony Playstation’s success can be attributed to early gaming studio acquisitions (Naughty Dog, Santa Monica Studios, Guerilla Games, Insomniac, to name a few) taking a bet on teams and IP early. It therefore has a stellar stable of amazing games that are exclusive to its platform and require to buy its console to play them. Sony thereby emulated the playbook of the earlier chapter of the console wars where Nintendo and Sega owned proprietary studios which created exclusive IP. Household names like Mario, Zelda (Nintendo), Sonic (Sega) could only be played on Nintendo or Sega devices respectively (Sega is no longer a console producer and now only a second grade multi-platform software developer).

Microsoft entered the gaming market after Sony and made some strategic mistakes. They didn’t acquire many studios comparatively, their attempt to turn the console into a home entertainment box alienated gamers, they tried to compete with the Wii with their ill fated Kinect (RIP), and have no VR strategy to speak of. However, fans would say this has changed over the last few years under Phil Spencer’s leadership. One of the biggest signs of the strategic importance Microsoft is placing on gaming came with the acquisition of Zenimax in 2020. This was the biggest acquistion in gaming (until the recent deal was announced) netting them IP like Doom, Quake, Wolfenstein, Elder Scrolls, Fallout and Dishonored.

IP WINS PLATFORM WARS
It’s become obvious that the platfrom war between Sony and Microsoft has now entered a new phase. While hardware was a factor in earlier console generations, it is now all about exclusive IP. As a gamer this is very annoying. Some of the IP that Microsoft is acquiring includes the most iconic cross-platform IP on the planet - Warcraft, Diablo, Starcraft, Overwatch and Call of Duty.

While some gamers and pundits still hope that this IP will be cross-platfrom in the future, that seems like a pipe dream to me. We already have evidence of how Microsoft thinks about this sort of acquistion by looking at the Zenimax deal. The sequel to one of the most successful cross-platfrom Action RPGs ever, The Elder Scrolls, that they acquired as part of the deal will be exclusive to Xbox and PC. It feels naive to think that they would approach the new IP any differently. The argument that is made is that the revenue loss of not selling as many units on other platforms would be too steep to sacrifice. That feels like a short sighted conclusion. Microsoft can extract revenue on many fronts from the user if they are part of their eco system. This doesn’t have to only be directly tied to the game unit sales. For gamers this means in future we might have to buy two consoles or game subscriptions if we want to play the biggest triple A titles.

THE GAMES INDUSTRY 2.0
This generation of consoles is probably the last. The next phase of gaming will be much more about streaming games across platforms. Google’s Stadia is already an attempt at doing this but without any prior relationships in the gaming industry and any decent studios they stood no chance. Microsoft on the other hand looks well position for this future. Both their Azure web services platform as well as their stellar IP will allow them to create compelling games as a service subscription.

As it stands its Gamepass online game subscription is already much more exciting than Playstation Plus. All triple game exclusives and some non-exclusive triple A titles are available to Gamepass holders for free. Consider the new IP being folded into this subscription exclusively and imagine Microsoft Gaming an app that is distributed on various hardware platforms like Netflix. How would this play out? Every PC could have a Microsoft Gaming app preinstalled; every Samsung Smart TV could come with the Microsoft Gaming app; maybe even a strategic partnership with Apple would see the Microsoft Gaming app in the App Store.

This looks like the video streaming wars just with games. A notable difference is that making TV shows is easier than making triple A games. Creating a tripe A game can take up to 5 years and require more rare specialised talent. Also spinning up a video streaming service is a much more trivial endeavor on the backend hardware side than it is to do the same for gaming. Some of the game computation will require sophisticated and high powered GPUs. Latency is not tolerated in gaming where millimeter and millisecond inputs matter. Therefore high bandwidth connection and distributed data centers are paramount. This actually might become an issue for Sony down the line as they may have to partner with someone like Nvidia or Amazon to deliver a competitve streaming game service (they do have Playstation Now but it’s not very successful). All that aside, exclusive content is the only differentiating factor in the video streaming war between Netflix and Amazon so Microsoft assuming the same will be true in the future of gaming, is premptively buying itself a nice IP advantage.

GAMING = SOCIAL = METAVERSE
Billions of gamers all around the world are engaging with other gamers in social virtual worlds every day. All this talk about the Metaverse is somewhat trivial for gamers. I’ve met one of my best friends through World of Warcraft. I can still very much remember where in Ironforge we sat down and became good friends. Some moments gamers experience in virtual worlds compete with real moments in terms of their excitement and exhiliration. We gamers are already bought into the Metaverse. As big tech is trying to figure out how to gain a bigger share of wallet from our waking hours, owning engaging game like experiences in virtual social worlds feels like a smart investment.

Gaming is the highest grossing form of entertainment on the planet. Gamers are already early adopters of the Metaverse. Gaming is really the super app which can seed virtual worlds. It’s hard for Facebook to convince me to spend time in their new virtual world app Horizon Worlds but give me a Zelda Metaverse to explore and I will probably lose weeks of my life to it. Yes, this might not be compelling to everyone but seeding the early Metaverse with engaged players is going to be crucial for it to cross the chasm to the mainstream.

If you believe that online time will continue to steal more time from other media and more importantly from offline life then investing in successful gaming IP seems like a good bet. Especially if the online versus offline trend continues, we will end up with a world where everyone will own more online goods than offline goods. That means the future of digital commerce both for digital content subscriptions and goods is very bright. With this acquisition Microsoft has become one of the most formidable big tech player vying for a prominent role in the future of the metaverse and these future revenues.

WHAT'S NEXT?
With this move Microsoft has created a new landscape, which will likely lead to more of big tech buying gaming publishers. I suspect Ubisoft will be on the market and a potential buyer will be Google. They collaborated closely on Google’s streaming platform Stadia. Ubisoft has compelling IP with the Assasins Creed, Far Cry, Watch Dogs, and the Rainbow Six series (Tom Clancy). Their stock price has also taken a beating over the past months and is trading about 50% down from their all time high. Other publishers with strong IP are Electronic Arts and Take Two. Potential buyers could be Sony, Facebook, Amazon, Apple and Netflix (their pockets are probably not deep enough).

We will likely also see more partnerships in the space between some players who own different parts of the stack. While Nvidia is supplying everyone in the graphics war with weapons one can imagine that their Omniverse product could be a great way for someone like Sony to overcome their lack of server side web and graphics services competence.

One of Microsoft’s biggest weaknesses compared to Facebook and Sony is their non-existent VR strategy. They do have Hololens however that is more focused on enterprise solutions at present. I am pretty sure they will be announcing something here soon. They are really doubling down on gaming as a core pillar of their future revenue and as such not having any gaming focus VR hardware is not viable for long.

While as a gamer I am annoyed about the fact I will have to own more consoles or subscriptions to play Blizzard Activision titles in the future, the fact that Microsoft is taking such a big bet on gaming excites me about the future of the industry. Onwards!

Arcane is based on the global video game phenomenon League of Legends (LoL) by Riot Games. Video games are big business (bigger than movie and music combined actually) and LoL is the 15th most successful franchise of all time (Pokémon is no. 1) grossing more than $8Bn while also being the youngest game in the top 15. LoL spawned a whole new category of game referred to as Multiplayer Online Battle Arena (MOBA). As the name suggests the premise of the game is an online player versus player battle. Two teams of players fight it out against each other on a map where the objective is to take the opposing teams tower. This simple premise however provides for massive strategic and tactical depth, which is why it is one of the most popular Esports games on the planet. The game itself doesn’t provide very much scope for a narrative experience but to their credit Riot built an elaborate universe that the more than 140 playable hero characters inhibit.

Frankly, I didn’t believe the LoL world would be interesting enough for a successful TV series but boy was I proven wrong. Credit has to go to the Paris based animation studio Fortiche for its outstanding work. The animation not only has a very distinct style but also manages to convey kinetic energy like I have never seen before. The story unfolds in 3 acts of 3 episodes each. The first act is laying out the characters in their childhood while 2 & 3 show us the cast as adults. This allows us to connect deeply with this colourful group well rounded protagonists. The themes used to drive the story forward are eternal and the pacing leaves very few dull moments. I will refrain from saying anything more about it to avoid spoilers.

The runaway success of the show has already secured a second seasons which was teased last week. So even if you don’t have a clue about LoL, or like gaming and aren’t the biggest animation fan I still throughly recommend checking this gem out Arcane on Netflix. Now with the curse lifted there is hope for the all those video game adaptation projects on the horizon!