I’ve often pondered this and I have concluded that there are a number of factors:
1. Licensing. While it might appear that the Indiana Jones IP is fully in the hands of Disney, it’s plausible that there are nuances behind the scenes. For example, Paramount owns the distribution rights to the first four films. That’s a different issue, but I mention it as an example of how rights can become fragmented over time over multiple contracts. I wouldn’t be at all surprised if the rights to Fate of Atlantis are more complex than we see from the outside. Having said that, I’ve no evidence of this.
2. It was a good game, but does that make for a good movie? FoA had some great game features: multiple paths, fun puzzles, classic adventure game exploration and interactivity, awesome pixel art - but none of these are useful to a movie.
3. The script was… OK. It doesn’t have any standout quotable lines like the first three films did. Its comedy is more slapstick than witty, and there are more than a few video-game in-jokes. It’s also highly derivative, written, I suspect, to make players think “This is cinematic! This is just like a real Indiana Jones movie!” To that end, it worked brilliantly. But in the 90s, games were still a sideshow compared to Hollywood, and were written in a parodic style, not yet having found their own space as a unique medium. To an extent, this is still true today.
4. An aging Harrison Ford is tough to reconcile with a story set in the 1930s. I expect this alone was a big driver in the studio wanting new scripts set in the 50s and 60s for the last two films.
5. Movies based on games have an abysmal track record, and I’m sure Hollywood producers get an allergic reaction whenever someone suggests another one.
And yet, despite all the above, FoA is still fantastic raw material for a movie. The plot, mythology, locations, set-pieces, and even the music, are all perfect for being reimagined on the big screen. Which leads me to the final reason why I think it hasn’t happened:
5. Nobody took games seriously in the 90s, Lucas was in control in the 00s for Crystal Skull and wanted his own story not somebody else’s, Disney was distracted by Star Wars and Marvel in the 10s, and by the time we get to Dial of Destiny in the 20s, Disney has become so risk averse that the idea of pulling ideas from a video game seems far outside what they are creatively capable of. Sadly, with Dial of Destiny bombing, the franchise is probably dead until the 30s.
Still, the fact that Disney lawyers shut down the recent fan-remastered version of the FoA game gives me hope that they still recognize how much value that IP has. They’ve strip-mined every other IP, so it’s possible they will eventually realize they've been digging in the wrong place, let go of Harrison Ford (in either live, de-aged, or posthumous generative form), and get their top men working on it.
