Why ‘Star Wars: Episode VII’ Is a Huge Risk for Disney

It's silly to suggest that the first of the new Star Wars will be anything but a massive hit for Disney (NYSE: DIS  ) . Even if the movie is terrible -- which anyone who saw Episode I: The Phantom Menace knows is possible -- curiosity will bring the movie a huge box office haul.

But unlike the prequel trilogy -- which built to the have-to-see-it moment of the creation of Darth Vader -- a lousy first film could dim prospects for its sequels.

Star Wars box office history

The first Star Wars, Episode IV, A New Hope, was a completely unexpected hit. The movie was an unknown quantity from George Lucas, a then largely unknown director. That film has gone on to become one of the most (if not the most ) profitable movies of all times. In addition to its huge box office, the movie also basically created the licensed toy business and has been repackaged for rerelease in various formats more times than even the most ardent fan would want.

Box Office Mojo shows the domestic, international, and total box office takes for the second Star Wars trilogy.  . 

  • Episode I, The Phantom Menace (1999): $474 million U.S., $552 million foreign, $1.02 billion total.
  • Episode II, Attack of the Clones (2002): $310 million U.S., $338 million foreign, $649 million total
  • Episode III, Revenge of the Sith (2005) : $380 million U.S., $468 million foreign, $848 million total

Interest in the series was clearly enormous with Phantom Menace  bringing in $1 billion, but that film being lousy chased away 35% of the audience as Attack of the Clones brought in $350 million less.

It can also be argued that had Phantom Menace been a better movie, Revenge of the Sith would have maxed out over $1 billion (an extra $150 million in box office). Making a bad first movie -- Phantom Menace scores a mediocre 57% at Rotten Tomatoes, which is kind for how dull the movie was -- may have cost the trilogy half a billion in lost revenue.

There is a huge potential audience for Star Wars

Disney and director J.J. Abrams have been very slow to release any details of the new movies, but they did post a press release about Episode VII earlier this week. In it they announced that principal photography starts May 2014 and will be based at London's Pinewood Studios.

They also released the first official details on the storyline for the films, when they take place, and a very hopeful piece of information for fans of the original trilogy. 

"Star Wars: Episode VII is set about 30 years after the events of Star Wars: Episode VI Return of the Jedi, and will star a trio of new young leads along with some very familiar faces. No further details on casting or plot are available at this time," the release said.

If familiar faces means a return of Mark Hammil as Luke Skywalker, Carrie Fisher as Leia Organa, and Harrison Ford as Han Solo, than Disney is doing the right thing. The enormous Star Wars fan base is more likely to connect to the movies if they in part update the audience on what has happened to these beloved characters. 

For the most ardent Star Wars audience -- the ones that buy the books and comic books that comprise the extended Star Wars universe -- it's not just having these characters in the film that's important, but what aspects of their literary past are acknowledged. 

The extended universe mostly makes sense

Though the early Star Wars books contain some logistics problems, a large effort has been made to make the entire Star Wars Universe fit together. For example, 2013's Kenobi, a book that explored the years after Revenge of the Sith but before A New Hope, took painstaking effort to explain why Obi Wan Kenobi in Episode IV looked way older than he should have given that only 20 years had passed.

Pleasing fanboys entirely and respecting every little piece of backstory is not always appropriate or possible on the big screen. But being respectful of the audience that has devoted time and money to keeping the Star Wars brand vital is important. 

It's OK if the Episode VII changes some details but if it skips over major story points -- say Han and Leia being married or Luke rebuilding the Jedi order -- then the series biggest fans could turn on it.

The Force should be with Episode VII

J.J. Abrams showed with the Star Trek reboot that he could be respectful of a franchise's past while creating a movie that does more than please fan boys. Episode VII will be one of the most anticipated movies of all time, but it will also be one of the most heavily scrutinized films ever as well. 

A bad first movie won't tank at the box office, but it might cost later films a huge chunk of potential box office. If a bad Phantom Menace cost $500 million, the stakes should be even higher here because this is the first movie under the Disney banner.

Make a good movie -- not even a great one just more Episode III than Episode I -- and Episode VII could be a billion-dollar movie that leads to billion-dollar sequels.

The Force is strong with this stock

Like the difference between A New Hope and Phantom Menace, there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (10) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 21, 2014, at 10:44 AM, mnadel wrote:

    As a long time Fool, I do not understand why the Motley Fool degrades itself by publishing articles like this.

  • Report this Comment On March 21, 2014, at 1:12 PM, pondee619 wrote:

    mnadel:

    I disagree. At least this story is about one company and possible influences to its price. To my mind this is far better than:

    Better Buy: Granny Smith vs. Star Lug Wrench

    I'll be glad when basketball madness is over so this fool madness can end.

  • Report this Comment On March 21, 2014, at 1:26 PM, thedjphenomenon wrote:

    I think you missed the point pondee, this article is worthless because JJ Abrams has mastered sci-fi reboots with Star Trek and there is zero doubt the next three SW movies will be anything less than blockbusters.

  • Report this Comment On March 21, 2014, at 3:44 PM, McSniperliger wrote:

    I have a feeling this one will bomb hardcore. There has not been any real evidence on what this one will be about. Some articles say it'll be based around Boba Fett and now they are saying 30 years after Jedi. So let's see it'll be 32 years since Jedi came out so I can kind of see where they are coming from on doing it like this.

    So for now I'll be skeptical about this movie and next 3 movies. Since it seems like they are missing details from the books that came out.

  • Report this Comment On March 21, 2014, at 5:28 PM, Dee177 wrote:

    LOL @ the motley fool posting ridiculous headlines to grab readers. No, star wars is not a risk at all. It will gross infinite cash on name recognition alone. PLUS they are bringing back the original cast. No matter how bad it is (*cough* the prequels) they will still be rolling in dollars especially when you factor in overseas box office. Nice try though fool.

  • Report this Comment On March 21, 2014, at 5:28 PM, Dee177 wrote:

    Oh and just FYI no one cares about the expanded universe.

  • Report this Comment On March 21, 2014, at 7:34 PM, Droppo wrote:

    I'm not too worried about this new trilogy compared to the prequels. The prequels had a forced story that had to lead to a certain place. They are free now to do whatever they want since it is forward looking. I also expect they will have learned from a few mistakes made in the prequels as well. Yep, I'm looking forward to the next movies and expect good things from them. Nothing will compare to the originals, but why the hell should they have to in order to be good?

  • Report this Comment On March 21, 2014, at 11:28 PM, Kidcardco wrote:

    I agree. Though the movies won't bomb it will be alienating it's hardcore fans who love the EU. I for one will be done with Star Wars after this year and NOT be watching it in theaters.

  • Report this Comment On March 22, 2014, at 1:20 PM, JTRK wrote:

    I for one will be in line on day one. The biggest problem with episode 1-3 was Lucas. Now that he is gone the story can continue. There is a wealth of stories published that 7 can be gleaned from.

    Unless 7 is so horrible that it is unwatchable, movie 8 should do well also. Everything in the article is basically a no-brainer and has already gone through most minds. So my response to this article is "Duh!"

  • Report this Comment On March 23, 2014, at 7:40 AM, eejit12 wrote:

    If the writer of this article had done any decent research, if any, he would know that no aspects of any characters' literary past will be acknowledged from the books in the Star Wars Expanded Universe. this trilogy is a completely brand new story-line that will not draw upon any of the previously written books.

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