While there were plenty of enemies for Peter Parker to fight in Spider-Man: No Way Home, there’s a compelling reason why Jake Gyllenhaal’s Mysterio did not return:

A Still Of Jake Gyllenhaal's Mysterio From Spider-Man: Far From Home
A Still Of Jake Gyllenhaal’s Mysterio From Spider-Man: Far From Home

While there were plenty of opponents for Peter Parker to confront in Spider-Man: No Way Home, there’s a compelling reason why Jake Gyllenhaal’s Mysterio did not return for the final instalment of the Homecoming trilogy. Mysterio would have been a good fit for the multiverse villains since he would have been a nemesis who died battling the Webslinger. However, the MCU’s portrayal of Quentin Beck in Spider-Man: Far From Home ensures that he only works as a one-time antagonist. In Spider-Man: No Way Home, Peter Parker unintentionally breaks a Doctor Strange spell that was supposed to make everyone forget he was Spider-Man after Mysterio reveals his identity to the world. This was just before the villain died, and he was doctoring tape to make himself appear as the hero and Parker as the evil. The Green Goblin, Doctor Octopus, Electro, Sandman, and the Lizard all appear in the MCU as a result of the tampering spell, owing to connections to Spider-Man in their respective realms. Mysterio, on the other hand, did not make a comeback (despite original plans to the contrary).

New No Way Home concept art reveals early ideas for Mysterio’s comeback in the climactic confrontation against Doctor Strange:

New No Way Home concept art reveals early ideas for Mysterio's comeback
New No Way Home concept art reveals early ideas for Mysterio’s comeback

The New No Way Home concept art reveals early ideas for Mysterio’s comeback in the final confrontation against Doctor Strange, but it’s ultimately for the best that Mysterio didn’t appear. While the thought of Mysterio confronting Doctor Strange is aesthetically appealing, the reasoning behind his illusions would have complicated things. Essentially, Mysterio’s illusions were created by his army of drones, utilizing the holographic technology he developed while working with Tony Stark. Where else might Mysterio’s trickery be coming from if federal agents captured all of the drones in London and seized all of the assets at Stark Industries? Furthermore, in Far From Home, Spider-Man discovered the reality behind Beck’s illusions, so there’s no reason why Doctor Strange wouldn’t be in the know as well. Essentially, the MCU reduced Mysterio to a one-trick pony. While this is great for one film, it creates issues for future appearances (as exciting as that could have looked).

Mysterio’s greatest chance of reappearing in Spider-Man: No Way Home would have been as a variation from another universe:

Mysterio could have come back as a variant from another universe
Mysterio could have come back as a variant from another universe

The ideal method for Mysterio to return to Spider-Man: No Way Home would have been as a variation from another reality with powers comparable to Strange’s. Because everyone battling Beck (and viewers) would have already known his great secret, there would have been no need for drones to be retrieved or the supposedly necessary suspension of disbelief. While this option has more promise than bringing back the original Mysterio, it appears that Marvel Studios finally determined that Spider-Man combating Mysterio’s legacy was enough. Given that Mysterio was the major adversary in the last picture, it’s a good thing that new villains were highlighted and given greater screen time in this one. Furthermore, Beck’s resurrection may have lessened the horrible legacy he left behind after his death, convincing the public that he had sacrificed himself as a hero before being assassinated by Spider-Man. Spider-Man: No Way Home. Mysterio harmed Spider-Man’s image, leaving him with a poor public view that was spread by the Daily Bugle’s J. Jonah Jameson, something that would not have been as damaging had he returned and joined a slew of villains to combat Peter Parker again in Spider-Man: No Way Home.

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