A logical step for many mid-sized animation/vfx production shops who wish to expand beyond the role of service provider for major film studios is to produce their own intellectual property — or at least develop branded content in which they have a financial stake. The latter was attempted by Rainmaker Entertainment in its deal with Insomniac Games to develop the video game series Ratchet & Clank into a theatrical franchise.

Rainmaker’s gamble, however, didn’t quite work out as planned, and the film has had a disappointing box office run. As a result, Rainmaker recently announced that it would book an impairment charge of approximately CDN$10 million (approximately US$7.5 million).

While a number of companies were involved in financing the film, Rainmaker was the lead investor, putting up 63% of the production cost. The CDN$10 million writedown includes the studio’s proportional share of advertising expenses, estimated between $1-4 million, and will be applied against net income in the first quarter of 2016.