After a slow start at the box office, Walt Disney's (DIS -1.01%) Avatar: The Way of Water is slowly but surely quieting detractors. When the sequel to James Cameron's megahit debuted in mid-December, terms like "flop" and "bomb" were bandied about, suggesting that the $435 million opening weekend was somehow subpar.
However, it appears the House of Mouse will have the last laugh. Avatar: The Way of Water topped the box office for seven consecutive weekends, a rare feat that hasn't been accomplished since the original Avatar movie debuted 13 years ago.
More importantly, the estimates suggest that the film has already recouped its eye-popping production and marketing budget and is still going strong, which bodes well for Disney, its investors, and the future of Cameron's groundbreaking franchise.
Image source: Getty Images.
Pay no attention to the man behind the curtain
There's no official word from Disney regarding the production and marketing budget for Avatar: The Way of Water, and estimates vary widely. Early reports suggested the production budget was north of $250 million, a number that typically doubles when marketing is included. Later approximations put the production budget at between $350 million and $450 million, making it one of the costliest film budgets in Hollywood history.
Cameron himself stoked the flames of curiosity when he said it would "have to be the third or fourth highest-grossing film in history" to break even. At the time, Titanic was No. 3 and Star Wars: The Force Awakens was No. 4 on the all-time worldwide box office list, with $2.19 billion and $2.07 billion, respectively. Cameron later clarified his comments, saying, "I never actually gave it a number. I said it would has to be among the highest-grossing films in history and somebody else applied that number and it got picked up. The number is actually less."
However, Cameron filmed Avatar 2, 3, and 4 at the same time, running up a production budget of roughly $1 billion, so the total cost may have played into those original estimates. The break-even point was actually in the neighborhood of $1.4 billion, according to Variety, a benchmark the film has already cleared with ease.
A $1.4 billion bet that paid off
Avatar: The Way of Water continues to rake in ticket sales, with current worldwide box office of about $2.18 billion, according to Box Office Mojo. This makes the film the fourth-biggest box office hit of all time, behind just Avatar ($2.92 billion), Avengers: Endgame ($2.8 billion), and Titanic ($2.19 billion), and it continues to add to its box office tally. Even using Cameron's fuzzy math, this makes the movie a moneymaker -- and its theatrical run is far from over. The original Avatar had incredible longevity at the box office, running 234 days. The sequel may not run that long, for a variety of reasons, but this helps illustrate the long-term appeal and potential staying power for the Cameron blockbuster.
Given the state of the movie theater business and the uncertain economy, there aren't any guarantees Avatar: The Way of Water will do as well as its predecessor, but there is evidence that suggests it could.
Audiences have thus far been willing to pay up for premium formats, including Dolby and Imax, which results in higher ticket prices and better box office results. "Audiences are showing a strong preference to see the film in premium formats," said Shawn Robbins, chief media analyst at BoxOffice.com.
Further boosting its chances is robust global demand. In fact, roughly 70% of ticket sales through its seventh weekend came from international markets.
This all points to a massive bet that paid off big-time for Disney, with additional sequels still to come. Investors will want to listen closely for more details and any commentary from the media giant's management regarding the film's performance and future installments when Disney reports earnings after the market close on Wednesday, Feb. 8.
