‘Avatar 2’ Bombs in China – but Otherwise Soars to $661 Million Global Box Office

“We may never know how the second Pandora-set picture would have performed in China had it opened in non-COVID circumstances,” stated attorney Stephen Saltzman. The head of the international entertainment group at the law firm Fieldfisher noted that the film’s opening weekend came soon after a lifting of COVID-specific restrictions and a rise in infections.

Whatever the reasons for the softer-than-hoped performance, the result merely continues a trend. After these last few years, Hollywood is, as previously reported by TheWrap, once again treating Chinese box office as a mere luxury.

Asian Studies Professor Deepak Sarma of Case Western Reserve University noted that “the financial allure of China is waning and Hollywood is a few steps behind.” He noted that tech companies are “moving out of China to Vietnam to diversify their manufacturing capabilities.”

As previously detailed, Hollywood’s share of Chinese box office has gone from a peak of $3.3 billion in 2017 to a likely finish of over/under $500 million in 2022, with the number of non-Chinese movies allowed there plummeting from a high of 73 in 2018 to under 30 this year. Fewer movies are getting in and those that do are (save for rare exceptions like “Godzilla vs. Kong,” which earned $188 million in 2021) earning less compared to pre-COVID times.

Meanwhile, Hollywood biggies like “Doctor Strange in the Multiverse of Madness” ($965 million sans China) or “Minions: The Rise of Gru” ($37 million in China out of $935 million worldwide) are earning business-as-usual grosses everywhere else while Chinese tentpoles like “The Eight Hundred” ($460 million in 2020) or “Hi, Mom” ($835 million in 2021) pull in pre-COVID-level business in China.

Saltzman reminded TheWrap that “the notion of China saving failed Hollywood tentpoles was mostly a myth.” Indeed, even during the 2010s, films like “xXx: Return of Xander Cage” earning $164 million in China out of $385 million worldwide or “Resident Evil: The Final Chapter” grossing $159 million in China and $312 million worldwide are an exception to the rule. Most of the big Hollywood movies that broke out in China were the same MCU movies, “Jurassic” sequels and “Fast Saga” flicks that broke out worldwide.

Former DMG president Chris Fenton explained to TheWrap that “anything that comes from Hollywood is now, more so than any time within the last decade, explicitly seen by Beijing as propaganda from the West.” The author of “Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, & American Business further noted that even in-your-face “soft power” American propaganda like Tom Cruise’s “Top Gun” sequel and seemingly harmless rom-coms like “Crazy Rich Asians” (which show people living in comparative wealth and freedom and behaving as they couldn’t in China) are often looked at with stronger governmental or cultural disapproval.

“Case in point,” argued Fenton, “the Canadian-born James Cameron — who has done everything right over the past two decades to endear himself to China — and his latest “Avatar” sequel currently represents too much of America in the eyes of Beijing.”

“You play by the rules, look at the riches you’ll have,” noted Fenton, implicitly describing the tacit agreement between the two moviemaking superpowers in the previous decade. He also asserted that “Beijing feels they simply do not need Hollywood anymore, since they now have a thriving tentpole industry and keep all the revenue from the homegrown films.”

As such, even an overall decline in theatrical revenue (the first half of 2022 in China was down, in terms of overall theatrical earnings, 38% compared to 2021) may be considered an acceptable price to pay by the Chinese government for maintaining cultural supremacy and prioritizing their own tentpoles.

Part of the implied quid-pro-quo was in China using Hollywood interest to learn the tools of the filmmaking trade. China has been releasing its own culturally specific, big-budget, high-production value and crowdpleasers for nearly a decade. The success of “Wolf Warrior II” ($854 million in 2017) arguably signaled that China could do it for themselves, which is also the implicit subtext of Wu Jing’s “Chinese government operative saves Africa from genocidal arms dealers without America’s help” slam-bang action spectacular.

While some of these films were globally mainstream enough to act as potential cultural ambassadors, a change in priorities (and worsening tensions between America and China amid the Donald Trump presidency), caused China to begin emphasizing in-country patriotism over global proselytizing.

“Using cinema to project a culturally-specific image beyond its borders is not the same priority as it was before,” argued Saltzman. This could mean fewer conventionally/globally mainstream Chinese tentpoles like Jackie Chan’s “Kung Fu Yoga” or Yi-Mou Zhang’s “The Great Wall” — starring Matt Damon and Pedro Pascal — and more stereotypically nationalistic (but generally not jingoistic) quasi-propaganda war epics like the two-part, shot-in-IMAX “Battle of Lake Changjin” which earned $910 million in 2021 and $610 million in 2022.

The new normal going forward could be one of mutually-assured indifference. However, the (thus far) global box office success of “Avatar: The Way of Water” with a presumed under-$100 million total from China again shows that, especially when COVID conditions improve, China’s theatrical industry may need Hollywood blockbusters more than Tinseltown needs Chinese box office. That, just focusing on the theatrical moviegoing business, could result in neither industry unduly influencing the other.

“I want [Hollywood] to be a success, to be a bastion of freedom of speech and American/Western values, and it will again,” declared Fenton. He often expresses mixed feelings on his key role in bringing Hollywood, including the MCU, to China, having helped “Iron Man 3” become a trendsetter in the summer of 2013. “It’s important for our movies to resonate in China, but not at the expense of our own cultural values.”

This article was updated to reflect most current global box office totals from Disney.