In defense of the 1999 film Universal had tried for a while to remake The Mummy and keep it strictly as a horror tale. They met with the likes of Clive Barker and George A. Romero but both their approaches were too dark, violent and abstract that they didn't think they could evolve into crowd pleasing, financial successes. Stephen Sommers approached them to do an action/adventure yarn in vein of 1930's serials to make it feel less contemporary and use horror as more of a backdrop than the primary focus, and not *that* scary so more wider an audience could be reached, this method would prove to be ideal given their competition( More on that later).
Also keep in mind it was the 90's, after the likes of T-2, Jurassic Park, Independence Day, and Titanic there was a desire for larger, tent pole releases for the summer and winter seasons and given that The Phantom Menace was going to be released not just the same season but in the same month and few weeks apart they needed something that was going to keep steady business and likelier to stay in theaters than instantly dropped out the second prints of Episode 1 were shipped and delivered. The rest is history, and given the reception to both films I can imagine some people walked out of The Phantom Menace suggesting friends and family to see The Mummy instead despite conceptual differences but tonal similarities and expectation deliverables( Which probably were definitely not going to be as high as Star Wars, let's be honest). As an Indiana Jones knock-off it remains as fine as one as The Rock and Speed probably are to Die Hard, and it at least bests Kingdom of the Crystal Skull.
COOKIES AND MILK!-Ed
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