It was billed as the next Twilight: a blockbuster fantasy saga based on the hugely popular series of young adult novels by Cassandra Clare. But the next instalment in the Mortal Instruments series has now been put on hold while Hollywood executives try to work out why its predecessor landed as one of the year's biggest turkeys.

The $60m budgeted Mortal Instruments: City of Bones has so far picked up just $37m at the global box office following its release last month. Sequel City of Ashes had already entered production, with Sigourney Weaver joining stars Lily Collins and Jamie Campbell Bower. But the new film will now go back to the drawing board as production company Constantin Film fights to save the franchise as an ongoing concern.

"Constantin Film has a long tradition of adapting books to the big screen. Pushing back the start of production of City of Ashes was a decision we did not take lightly," said producer Martin Moszkowicz yesterday in a statement. "But after speaking with all of our partners on the creative and distribution side, it was clear that it will be beneficial to have more time to reposition the film in the current marketplace. The Mortal Instruments series has an incredibly loyal and ardent fan base and is a best-selling book series. While taking Cassandra Clare's vision to the screen we want to make sure to draw on the full potential of the franchise."

Mortal Instruments is just the latest franchise being positioned to take over as the new Twilight, as Hollywood vies to ape the enormous $3.3bn success of the saga based on Stephenie Meyer's bestselling series of supernatural romance novels. So far only dystopian series The Hunger Games, which is due three sequels after picking up strong reviews and impressive box office of $691m last year, has looked fit for purpose.

Mortal Instruments: City of Bones currently has a rating of just 12% on the review aggregator site Rotten Tomatoes. The Guardian's Francesca Steele wrote: "This is the first adaptation of Cassandra Clare's best-selling fantasy novels and a sequel is already on the way, as studio execs rush to fill that Twilight-shaped hole. Teen love triangle? Check. Werewolves and vampires? Check. This is film-making at its most cynical. But none of it actually makes much sense."