On March 22nd, "The Croods" hits theaters as the next animated movie from Dreamworks Animation (DWA). Before the original story comes to the big screen, people around the world will have a chance to familiarize themselves with the movie's characters via a video game. Rovio, the Finnish company behind the massive hit "Angry Birds", is partnering with Dreamworks for the new mobile game.
"The Croods" stars the voices of Nicolas Cage, Ryan Reynolds, and Emma Stone. Critics have been pleasantly surprised by the strong storyline. The movie premiered at the Berlin International Film Festival and has also been showcased at other festivals. Strong word of mouth and positive critical reviews are likely to help the box office of the movie.
The game centered around "The Croods" will be released on March 14th. Last year, Rovio released "Amazing Alex", its first non "Angry Birds" game since the mobile game series took off. The game shot up to the top of the charts before falling down the downloads list.
In 2011, Rovio partnered with the animated movie "Rio", from 20th Century Fox (NWS). A "Rio" specific version of the popular "Angry Birds" mobile game was launched prior to the movie's release in theater. The game was so successful that it became part of a trilogy of "Angry Birds" games released for video game consoles. "Rio" had a huge opening of $39.2 million, before ending with a total domestic box office total of $143.6 million. The success of the "Angry Birds: Rio" game also helped the movie see powerful international box office results. The movie grossed $341.0 million on international screens.
Dreamworks needs a hit with "The Croods" after the poor box office results of "Rise of the Guardians". I highlighted the potential of that movie in a previous Seeking Alpha article, but the movie missed estimates and fell flat in the theater. "Rise" made only $23.8 million in its opening weekend and barely crossed the $100 million mark domestically ($102.1 million). "Rise of the Guardians" made only $200.3 million in international markets for a total box office of $302.4 million. As you can see, "Rio" made more on international screens than "Rise" made in its entire theatrical run of 100 days. Look for the mobile game to help the international box office of "The Croods".
"Rise", which racked up huge production costs of $145 million, was hurt by the original concept. Dreamworks is hoping that its newest movie does better with the new game from Rovio. Dreamworks continues to struggle with its newer concept movies, with the exception of "How to Train Your Dragon", and relies heavily on its blockbuster franchises like "Shrek", "Madagascar", and "Kung Fu Panda".
For Dreamworks, the movie also will set the tone for its new distribution deal with 20th Century Fox. This will be the first movie to be released under the new deal with 20th, after the old deal with Paramount expired and was not renewed.
Dreamworks has an exciting lineup of movies in 2013 and 2014. These movies could all see box office lifts from mobile or social games created before the movie hits theaters. I'm hoping that this deal with Rovio is the start of a long lasting partnership. Here is a look at the two year lineup schedule:
- 2013: "The Croods" (March 22), "Turbo" (July 19)
- 2014: "Mr. Peabody & Sherman" (March 7), "How to Train Your Dragon 2" (June 20), "Happy Smekday!" (November 26)
Analysts on Yahoo Finance see Dreamworks Animation earning $0.69 in fiscal 2013. This comes after the company posted a surprise loss of $0.43 in 2012. Revenue is expected to hit $686.9 million for the fiscal year, a loss of 8.4%. Analysts seem more bullish on fiscal 2014 and the company's three movie release schedule. Analysts see earnings per share hitting $0.93 from a 16.3% revenue increase to $798.9 million.
Shares of Dreamworks trade at $17.08 at the time of writing. The company now has a market capitalization of just over $1 billion. Over the last fifty two weeks, shares have traded between $15.90 and $22.98. While the company won't likely see that $22.98 mark until its fiscal 2014 strong release schedule, shares are undervalued at these levels.