Speaking with MTV, Favreau said, “You have to do The Mandarin. The problem with The Mandarin is, the way it’s depicted in the comic books, you don’t want to see that. He also has 10 magical rings, and it just doesn’t feel right for our thing, so it’s either tech-based or the rings are not really rings. But maybe with Thor and all those others you’ll introduce magic to that world and it won’t seem so out of place.”
The original character from the comics (Mandarin) will have to be altered from Asian to Middle eastern, and his powers may need to be contoured to the largely tech based Iron Man world that Favreau has created around his version on Tony Stark.
Favreau the went on to say “But then Iron Man 3 is years down the road, and that has to reflect the reality of what’s been established.” As far as directing goes, Favreau has taken a “wait and see” approach until Marvel’s next super team up The Avengers (of which he is producing).