'Godzilla' Destroys at the Box Office and Earns a Sequel

Godzilla stomps on tracking estimates to deliver a $93 million American opening and a record $103 million overseas. Hollywood's newest big hitter is born.

May 20, 2014 at 2:58PM

Screen Shot

Source: GodzillaMovie.com

Time Warner's (NYSE:TWX) Godzilla has crushed expectations. The monster movie delivered a $93 million opening at North American theaters and scared up $103 million in overseas markets. That's a fantastic start for the rebooted film series, and a clear indication that the movie will go on to become one of the summer's biggest success stories. Godzilla's gigantic box office haul was quickly followed up with the announcement that a sequel was in development. What does the future hold for Warner and the recently returned King of the Monsters?

Warner Bros. strikes back

Warner Bros. has caught a lot of flack for its 2014 film lineup. The most notable deficiency was the lack of a tentpole superhero film. Caped crusaders and spandex-laden heroines have become the film industry's most reliable players, generating almost surefire profits and building interconnected film universes that create a type of cross promotion. The model was ingeniously introduced by Disney (NYSE:DIS), and replicating the company's Avengers success has been the obvious obsession of rivals Warner, Twenty-First Century Fox (NASDAQ:FOXA), and Sony (NYSE:SNE). With Godzilla stomping to megahit status, jabs at Warner's 2014 slate now seem misplaced.

Godzilla beats superheros 

Godzilla's 93 million American opening puts the film just above what Sony's Amazing Spider-Man 2 achieved, and just behind the opening bow for Disney's Captain America: The Winter Soldier. It's a spectacular achievement for a resurgent property. While Spider-Man appears to be slipping, he and Captain America are two of the biggest commodities in entertainment. For Godzilla to come in with very similar numbers to Cap and Spidey is a huge coup for Warner. It's a success that rival studios will be keen to replicate.

A giant monster stands out from the crowd

The incredible return of Godzilla was driven by a variety of factors. Many analysts were quick to peg the reptile's return as a likely underperformer, citing the disappointing performance of the creature's 1998 cinematic outing and the dominance of superheroes as reasons audiences would turn an indifferent eye to the monster reboot. The picture now looks on track to pass $700 million in worldwide earnings. It will also cause studios to rethink their release slate strategy.

Screen Shot

Source: GodzillaMovie.com

Released in between three of the year's biggest superhero movies, Godzilla has outperformed even most optimistic projections. Audiences may have yet to tire of superheroics, but Warner's mutated reptile has demonstrated the value of timing and variety. The extent to which the action genre has been dominated by the likes of Iron Man, Batman, Spider-Man, Captain America, and the X-Men has created a clear opportunity to deliver blockbuster curveballs. Godzilla's draw as a palette cleanser of sorts will be closely looked at as studio's map out future release windows.

A high-margin monster

Godzilla's performance becomes even more impressive when you look at its earnings breakdown. The movie's per-screen average was pushed up by great engagement in high-margin formats. Imax (NYSE:IMAX) screenings accounted for 14.1 million, or 15%, of the film's domestic opening, with other premium screen formats accounting for $8.4 million. Future installments in the "Godzilla" property look to be a boon for Imax and other purveyors of premium cinematic experiences.

Battle of the mutants

The upcoming weekend's box office battle will pit Fox's X-Men: Days of Future Past against the currently reigning reptile. The team of returning mutants should have little trouble displacing Godzilla at the domestic box office, but an influx of Memorial Day weekend moviegoers should mean that the picture sees a very small drop. Word of mouth for Warner's monster looks to be fantastic. Days of Future Past will be an unqualified hit, but Godzilla will once again offer an out for those beginning to feel the onset of superhero saturation.

An overseas achievement

Screen Shot

Source: GodzillaMovie.com

Godzilla's $103 million overseas gross is enough to make it the biggest opening of the year. This factoid becomes even more impressing if you take into account that the picture has yet to open in China. With such strong global engagement, "Godzilla" now looks to be one of the most valuable properties in film, a stark indication of just how quickly a brand can skyrocket to prominence in the film industry. With the right development, Warner has a potential $1 billion box office property on its hands.

Godzilla breaks the status quo...

While much of the punditry surrounding Warner's film outfit has centered on its handling of 2016's Batman vs. Superman or 2017's Justice League, the success of Godzilla is a reminder that the cinematic world need not revolve around superheroes. When a trend appears to be at its strongest, it's often a good sign that there is an obscured window for meaningful differentiation and huge success. Godzilla just smashed through that window. 

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Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Imax and Walt Disney. The Motley Fool owns shares of Imax and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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