In the meantime, he has already wrapped his second collaboration with Ryan Reynolds, the time-travel action-comedy “The Adam Project.” Their first, “Free Guy,” was finished in 2019 and delayed three times due to the pandemic. While the movie is being released by Disney this week in a theatrical environment that faces serious questions about its future, Levy’s own profile has never looked stronger.

All of which puts him in a unique position to evaluate the connotations of “Free Guy,” a major studio release that actually mocks its own resources. Reynolds stars as the titular Guy, an NPC (non-player character) in an open-world video game where the characters don’t seem to have free will. For Guy, that changes when he meets Millie (Jodie Comer), one of the game’s designers looking to rescue it from the avaricious tendencies of game company head Antoine (Taika Waititi). Eventually, Guy’s journey finds him tapping into resources that include major Disney IP, references that Levy was able to tap after the 20th Century Fox project became a Disney property as one company purchased the other in March 2019. With “Free Guy” finally opening, Levy spoke about the ramifications of making a referential studio movie and why studio comedies are an endangered species. This interview has been edited and condensed for clarity. You first got the script five years ago. How much did you change it? We wanted to make an action-comedy that takes this video game concept into a more broadly accessible area of how we live and deal with empowerment as individuals, the yearning that we really believe every person has to step out of the background role and have an impact on the world. Thus began almost a year of rewriting the script to bring out the characters and humanist themes more and more. What about the explicit satire of corporate storytelling? We really took to developing the Antoine character, the villain played by Taika Waititi. We wanted Antoine to become a studio head in our own movie business — this studio head who is addicted to IP and sequels, who has disdain for the idea of an original movie. It was very fun to make an original new tentpole movie while we make fun of the rarity by which these kind of movies get made.

Fox/Disney How did that go over with the actual studio heads who hired you? I kept waiting to get in trouble. There are some lines that Taika says that are almost verbatim things that have been said to me in this business. I think that every studio is realizing that they better be able to take the piss out of themselves or they’re going to be in a worst position. Disney allowed us to open our very first trailer for “Free Guy” with a joke about “the studio that brought you ‘Lion King,’ ‘Beauty and the Beast,’ ‘Cinderella,’ comes…wait for it…a new movie!” At the time, that was a pretty audacious joke. We realized that Disney was willing to be in on the joke in order to avoid being the butt of the joke. That’s a general rule of comedy. You either make fun of the shit that people make fun of you for or you will be pay for it. There are precedents for using pre-existing IP to drive a story. “The LEGO Movie,” for example. “Ready Player One,” for another. And, most recently, “Space Jam: A New Legacy.” The guiding principle of the movie was that in order to differentiate ourselves from “The LEGO Movie” and “Ready Player One,” we couldn’t have a preponderance of pop culture references. We wanted to wait and only in the third act were we going to have some fun. Initially, there was talk of having Guy use Cable’s gun. But we actually liked the idea that this good guy character who never fires a gun in the whole movie. Then we noticed that our new owners were Disney, which has arguably the greatest toy chest in the history of the movie business, and we wrote them an email. I literally wrote them: “Dear Disney, this is Shawn and Ryan. We’re making ‘Free Guy.’ Can we use some of your toys?” You wrote this to Bob Iger? It was like Bob Iger, Alan Bergman, Alan Horn, and the heads of other labels Disney owned that I won’t mention to avoid spoilers. It was a very respectful group email, except instead of a typical work email, this one was asking for permission to use some of the most iconic objects in cinematic history. They said yes to all of them. So we birthed a sequence where we gleefully blow through $40 billion in IP. It’s this geyser of IP richness and then gets back to its heart. Jordan Strauss/Invision/AP

Studios seem like they’re trying to exploit their IP at every possible opportunity. Don’t you see a danger in that? My whole career is based on telling new, original stories that then become franchises — the “Night at the Museum” movies, “Stranger Things.” My next movie with Ryan, “The Adam Project,” is an original movie. I haven’t been in that many meetings where IP use is that mercenary. But I absolutely feel the consolidation of my industry and the desire by studios to leverage their brand identity by weaponizing the IP and iconography that exists in their library. That is a trend that is not likely to go away very soon. You found success directing studio comedies before the streaming era and now you have a deal with Netflix. How has the market for comedies changed since your career took off? The landscape has changed so radically. We’ve seen the near vanishing of the theatrical comedy. If “Free Guy” wasn’t also a massive spectacle action movie, it would have been harder to get made. When I was coming up — making things like “Date Night” and “Cheaper by the Dozen,” while my buddy John Hamberg was making “Along Came Polly” and “Why Him?” — the theatrical marketplace for the comedy was a truly a viable and beloved form. Now it’s almost entirely the domain of streaming, because studios are penciling out with a different math. They need bigger returns assured to feel the money that we’re spending upfront. The culture for comedy has evolved. How do you evaluate whether a joke goes too far? There is a consciousness and a sensitivity to what those boundaries are that is unprecedented. A lot of that sensitivity is appropriate and I support it wholeheartedly, but there’s no question that there is a wariness that is completely new and in some ways anathema to comedy, which by definition is about surprise and subversion. For instance, in “Free Guy,” there’s a scene where Ryan and Jodie are rallying these NPC troops. We came up with this joke about how rampant gun violence is in video games. We put in this little run of dialogue where Guy assumes that’s just a problem inside video games. It’s Jodie Comer, who exists in both worlds, who says no, that’s definitely a huge fucking problem in her world as well. It’s a topical joke and a topical issue. Ryan and I think a lot about those boundaries, but never want to make comedies that are unanchored to real life. It must be reflected in the absurdities of real life. It is day to day and — quite literally now — joke to joke to joke. This movie deals with the existence of a massive multiplayer game that consumes millions of people’s time. That is not science fiction. Does gaming pose an existential threat to the future of other media?

I spent a year studying gaming culture and staffing my crew with extremely passionate and knowledgeable gamers. I literally had it around me in every meeting. It made me realize that this is another form of entertainment and an aspirational connection. That’s what movies used to be — a place where you could be in an experience virtually with strangers and share something escapist and fulfilling. Gaming has evolved into that. I don’t think it’s an existential threat to filmmaking because I do believe that they are really different forms. It isn’t a survival of the one culture. If anything, we’re seeing multiplicity in streaming options, genre, forms of entertainment. I have come out of “Free Guy” with a deeper awareness and respect for gaming culture, but I don’t view it as something that could cause the death of the movies. There’s an unquestionable human thirst to connect with other humans. People need as many venues for connection as possible. “Free Guy” is now playing in theaters.  Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.