Why Blumhouse Has the Right Approach to Getting in Games

As top video game makers successfully translate IP into hit films and shows, it was inevitable that major Hollywood players would be gamings next newcomers.

Last month, Jason Blums horror-driven prodco Blumhouse announced the creation of its own gaming division, to be led by veteran video game producer Zach Wood (Prey: Mooncrash, Twisted Metal) and ex-PlayStation VP Don Sechler, who ran global operations at Sonys console brand for a decade.

Blumhouse Games indicated its initial planis to publish indie budget games costing under $10 million to produce, a strategy echoing the enduring success of the companys cost-conscious film productions, most recently Universals evil-doll thriller M3GAN.

Having grossed close to $175 million on a $12 million budget, M3GAN is yet another example of horrors viability at the box office at a time when critically lauded films from notable names are struggling to find an audience.

But video games are a different and costly beast.

HBO adaptation The Last of Us isa survival-horror franchisethat is one of PlayStations most beloved and successful IP, but its 2020 sequel The Last of Us Part II was estimated to have cost $100 million to make.

More recently, 2022s The Callisto Protocol was reported to have cost PUBG: Battlegrounds publisher Krafton around $162 million to make. The game underperformed, despite the fanfare behind its developer, Glen Schofield, who co-created EAs Dead Space series, another staple of survivor horror.

EAs own AAA remake of Dead Space shipped at the end of January to critical acclaim but launched to lower sales than Callisto did, per the U.K.s tracking of physical game sales, calling into question whether it has met EAs expectations.

Blumhouse is smart to wade into this business cautiously, especially since there are studios that know how to make games under tighter budgets.

Predominantly known for its Layers of Fear horror games, Polish studio Bloober Team made 2021s The Medium for under $10 million and claimed it only took days for them to turn a profit, despite the more modest popularity of and reception to their titles. Alongside Annapurna Interactive, another Hollywood-based companymaking smaller games, Bloober is one of the developers working on Konamis new slate of Silent Hill horror games.

Bloober also developed Lionsgates 2019 Blair Witch video game. Given Blumhouses creation of multiple horror franchises that could translate well togames, such as Paranormal Activity, Insidious and The Purge, Bloober is bound to be on the companys radar for potential partners.

But if Blumhouse aims to turn a profit the way its films have, it may be more interested in live services.

The company just announced it is developing a film adaptation of multiplayer horror game Dead by Daylight, to be co-produced with James Wans Atomic Monster prodco as M3GAN was. Initially released for PC in 2016, Dead by Daylight pits players against a killer controlled by another player as they try to complete tasks and avoid getting killed. This formula proved popular enough for the game to go multiplatform and license many notable horror characters as its been updated over the years, including the main killer in the Halloween films that Blumhouse produced a trilogy for.

The company is also in the middle of shooting its adaptation of Five Nights at Freddys, a point-and-click horror game made in just six months on a microbudget. The title grew extremely popular upon its PC release in 2014, spawning numerous sequels and lucrative merchandise. The success of Five Nights at Freddys is undoubtedly the focal point of Blumhouses desire to break ground in gaming.

Still, its unclear just what kind of games Blumhouse wants to make. Turning its own film franchises into games could require licensing agreements with distribution partners that entitle them to cuts of sales, meaning Blumhouse could prioritize creating original IP to maximize profits.

If Blumhouse wants to cast notable actors in its games, that could also drive up costs. Supermassive Games, whose narrative horror titles have starred the likes of Rami Malek, Justice Smith and Jessie Buckley, ended up seeking an owner and became a subsidiary of Danish company Nordisk Film in 2022.

And while Bloober Team may be a relevant example of what Blumhouse wants to do, it too has sought financial assistance, as Chinese tech overlord Tencent became its largest shareholder in 2021.

All the more reason why now is the best time for Blumhouse to shack up with another prominent horror producer, James Wans Atomic Monster. The companies expect their planned merger to be approved over the summer.

Blumhouse may be taking a risk by entering the precarious gaming space, but its not doing so without the power of partnership.