A pretty good idea...
I found the movie to be very well done overall, but there were a few problems that mustn't be ignored if you ever do a sequel (which would be a waste of a cliffhanger if you don't make one):
1- Audio= The movie was quiet....too quiet.... seriously even for an attempt at suspense or horror it was too quiet. There should have been some kind of background music going on at all times unless the scene itself calls for silence (like if Peach was hiding as Bowser slowly walked by.) The gunshots, hits, explosions, and other sound effects were quick and quiet too. Most notable was the explosives from the bazooka and the energy ball.... even if it doesn't work, it'd still make a BIG BANG. As for the voices, the zombie groans are easy to miss unless you have your speakers up really loud.
2- The story itself= The plot was easy to figure out, but that's not the problem. The only problem was that this plot could have been acted out using characters from any game... meaning: There weren't enough Mario references... I found it hard to believe that the only item block in the whole city is by a truck stop. Not to mention, there weren't ANY warp pipes, which are a must for this sort of thing, it'd have been nice to see them instead of the manholes in the roads at least. The character lineups were pretty limited even for Mario. exp: if this was in the Mario universe, where are the goomba zombies? (If you need an example, check out Bowser's Kingdom 666 for sprites and other concepts) Also, everyone knows that Wario would definitely do anything for food... even kill an entire zombie army alone, and by the way, I think it'd take years for him to starve himself to death XD.
3= The humor= There were a few funny jokes, but they were easy to miss such as: the Toad lying in the road who was still alive as Peach ran by, the door signs, and the shotgun options part. Ultimately, there were many missed oppurtunities for jokes that were missed, and the jokes that were included are quick to leave the screen.
4= Visuals= The sprites were fitting, but could have been way better... The zombies looked like they were regular koopas aside from minor modifications to their color. Their eyes made them looked too normal. The backgrounds were excellent. As for special effects, the only one that really stood out as being lame was when Peach was charging an energy ball that was faintly colored and terribly done (try a DBZ style next time).
In conlusion, try to fix what I previously stated if you plan to make a sequel, and it will be even more popular than this one.