Blumhouse, studio known for highly profitable horror films, is no longer producing Mattel’s Magic 8 Ball movie

Blumhouse is no longer a producing partner of Mattel’s planned Magic 8 Ball film.

On Friday, co-founder and producer Jason Blum told CNBC that the horror production power house was no longer attached to the toymaker’s project.

“We developed it for a while, but we are no longer attached,” he said. “I think they are developing it with someone else. I wish them the best of luck.”

Blum didn’t go into details about why Blumhouse exited the project. Representatives for Mattel did not immediately respond to CNBC’s request for comment.

The Magic 8 Ball movie was first announced in 2019 and is one of many projects in development under Mattel Films.

The company recently completed production on its Barbie film with Warner Bros and also has a Masters of the Universe film slated with Netflix. There are a dozen more projects in development, including films based on Hot Wheels, Major Matt Mason, Rock ‘Em Sock ’Em Robots, Uno and Barney.

Turning Magic 8 Ball into a horror story may have been a surprise, but Mattel’s decision to partner with Blumhouse wasn’t.

The studio has set a new standard for horror production in the 21st century, which is lifting the entire category. Blumhouse is best known for films like “Paranormal Activity” and the Academy Award-winning “Get Out” and its strategy of taking small-budget films and turning them into huge box office successes.

For example, Blumhouse partnered with Hasbro to create a movie based on the Ouija board. The film, released in 2014, cost just $5 million to make and went on to earn more than $103 million at the global box office. The sequel “Ouija: Origin of Evil,” which came out in 2016, cost $9 million for production and went on to earn $81.7 million.

As Mattel seeks to keep its margins in check and expand into theatrical entertainment, producing films cheaply that can go on to multimillion dollar success will be key. In working with third-party studios and distributors to bring its toys to life on the big and small screen, but minimize financial risk.