When Time Warner (NYSE:TWX) announced that the sequel to its 2013 Superman film Man of Steel would feature Batman and Wonder Woman and also introduce The Flash, Cyborg, and Aquaman, critics suggested that Warner was attempting to rush the success Disney (NYSE:DIS) achieved with the Marvel Cinematic Universe (MCU). Poor audience receptions for last year's Batman v Superman and Suicide Squad suggest there was some validity to those concerns, and production updates on The Flash and The Batman point to ongoing difficulties within the DC Extended Universe (DCEU).

Batman standing in front of a lit-up Bat Signal. Image from "Batman v Superman."

Image source: Time Warner.

Negative news surrounds the DC Extended Universe 

Initially planned for a March 2018 opening, the upcoming Flash film no longer has a firm release date and is without a director after losing the first two who were attached to the project. The movie's script is also reportedly undergoing a complete rewrite. 

A near-complete reset for The Flash is the most concrete recent evidence of DCEU troubles, but shakeups for Warner's upcoming Batman film could have an even bigger impact on the connected franchise. After stating that he would only direct the upcoming solo film if the script turned out to be high-quality, Ben Affleck stepped away from helming the project. Directing duties will now be handled by Matt Reeves (known for Dawn of the Planet of the Apes and Cloverfield), who briefly exited the film before rejoining following another round of negotiations . Having the film's principle players solidified is a welcome bit of good news, but persistent reports about script problems and Affleck's reduced role are concerning given how important The Batman is to Warner's superhero franchise.

While Affleck delivered his decision not to direct with reaffirmed commitment to starring as the Caped Crusader, rumors have also sprung up that the actor is no longer interested in being a part of the DC franchise. Batman is the most important component of the DCEU, and Affleck is the franchise's biggest star, so a recast for the character would be a major setback. 

Warner's live-action Justice League, standing from left to right: The Flash, Superman, Cyborg, Wonder Woman, Batman, and Aquaman.

Image source: Time Warner.

While rumors should be taken with a grain of salt, the upcoming Justice League and Wonder Woman films have also been described as "messes" by alleged insider sources, and these reports aren't exactly hard to believe in light of recent developments and previous reports on the projects. Wonder Woman has had a history of production troubles and personnel changes, and Justice League went through a rapid retooling after lackluster reception for Batman v Superman

What's at stake?

With an incredible wealth of characters, stories, and built-in marketability to make use of, the DCEU is Warner's most valuable film property. Batman v Superman and Suicide Squad performed well enough to make rebooting the franchise a distant consideration, but the movie universe faces diminishing potential if quality issues persist.

The DCEU's average gross of roughly $761 million per film across three entries is pretty close to the $779 million per-film average that Disney has managed across 14 MCU installments. Time Warner's franchise, however, has been relying on the appeal of some of its biggest characters, and it's not clear to what extent smaller releases will benefit from the synergistic effects of a connected universe.

Disney's ability to turn lesser-known heroes like Doctor Strange and the Guardians of the Galaxy ensemble into huge box-office draws has stemmed, at least in part, from the Marvel Cinematic Universe's consistent quality. Warner can probably count on Batman to be a box-office winner, but the DCEU's reputation for uneven films means that projects built around less-popular heroes, like Aquaman or Cyborg, might have trouble meeting expectations. In that sense, this June's Wonder Woman represents a big test for the franchise, as it will be the first non-ensemble film since 2013, and the titular character is not a proven box-office draw. 

The DCEU isn't living up to its potential

While the development of the DCEU probably isn't going as smoothly as Warner would have liked, the company is forging ahead with the current version of the property -- recently announcing that its Shazam movie will be split into two releases and confirming the search for a Suicide Squad sequel director. Until there are signs that audiences are tiring of DC films, staying the course is a good move, but failure to live up to the property's potential will mean missed opportunities across Warner's theatrical, video games, and consumer-products segments. 

Last year, DC-related merchandise revenues topped $4.5 billion in retail. That's an impressive figure that evidences the powerful appeal of the DC comics cast, but it's likely that the company will leave money on the table if it does not manage to improve the perceived quality of its superhero films. 

Keith Noonan has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.