Merry the Christmas Witch cost $1.5M to make with AI

"Merry the Christmas Witch," a two-hour AI-made Christmas film, cost $1.5 million to produce after its director priced a conventional version at $80 million, Variety reported on October 12, 2026.

Futurism picked the story up on October 18 and framed the film as AI "slop," using the same Variety interview for its facts. The attention lands less on the movie's plot than on its arithmetic: a feature that a studio would not fund at an estimated $80 million got made for roughly a fifty-third of that, by the director's own account.

What is Merry the Christmas Witch?

The film follows Merry, the first witch ever born on Christmas Day, in the bayous of Louisiana. Cast out by her coven, she returns when evil witches seize the kingdom and kidnap Santa Claus. It adapts a 2012 children's book by Bobbi Hess, a New Orleans technical writer, illustrated by Anne Reid, according to TW3 Entertainment's project page. Tom Walsh, the CEO of the independent studio TW3 Entertainment, directed and co-wrote the adaptation. Variety reported that Walsh came across Hess's book in 2014 at a Los Angeles meeting with her late husband.

Walsh hired a crew of about 50 people for a 10-month production he calls a "hybrid AI production." Foley artists, editors, sound designers and a composer worked as they would on any feature, and human actors recorded the script to guide how each character moved and sounded. Walsh then replaced those recorded performances with AI-generated voices because of syncing problems, Variety reported, using ElevenLabs for the voices and the video generators Seedance and Nanobanana, with the AI studio Phatty Acid. "The quality of your AI production depends on the quality of your traditional production staff," Walsh told Variety.

TW3's own project page shows first-look clips titled "Malacha's Performance," "Merry Fights the Brooms" and "The Sky Chase," plus storyboard-to-frame comparisons labeled "Sequence 13" and "Sequence 15B." Its production gallery shows the film's dub stage, a hand-annotated score book cued to timecode, and the published picture book. A trailer is listed as coming soon.

The film has no distributor. A spokesperson told Variety that "optimistic" conversations were underway with "a few different companies," and Variety noted the open question of whether general audiences will watch an AI-made holiday film at all. Neither Variety's report nor TW3's project page lists a release date, and no reviews have been published.

Walsh is already working on another AI feature. TW3's site names Losopolis as its second feature, in production now. A TW3 announcement dated August 26, 2026 said the project was originally envisioned as a traditional live-action production, and that the studio has developed more than 400 original characters across six fantasy worlds.

There is no release date or distributor yet. TW3's project page at tw3entertainment.com/projects/merry is where the first-look clips live and where the trailer, listed as coming soon, will appear.