Jigsaw's done it again. Not only have he and his sick apprentice Amanda engineered an evil game of pain for a new group of helpless individuals, but they've also sold a lot of DVDs for media company Lions Gate Entertainment (NYSE:LGF). It seems the Saw series is alive and well -- unlike most of Jigsaw's guests.

Lions Gate and its partner in crime, Twisted Pictures, dispatched a press release on Friday bragging about the financial power of the Saw movies. Can't blame them for showing off -- the studio does have a killer franchise on its hands. Saw III was released to home video on Jan. 23, and it's already a gory hit in the domestic marketplace, moving 1.6 million discs on its street date and 2.5 million discs in its first seven days on retail shelves to claim the No. 1 sales spot. Collectively, the three fearful flicks have grossed $400 million around the world. In addition, horror aficionados worldwide have purchased more than 10 million copies of Saw and Saw II combined.

The release also mentioned that Saw III had a strong debut on the new Blu-ray format. Pay special attention to this little fact, because any business associated with the movie industry -- e.g., Disney (NYSE:DIS), Time Warner (NYSE:TWX), Marvel Entertainment (NYSE:MVL), and Viacom (NYSE:VIA) -- is counting on the transition into a fresh medium to stimulate library sales. Sony's (NYSE:SNE) PlayStation 3 comes with Blu-ray technology, which should help guide it to the mainstream, while users of Microsoft's (NASDAQ:MSFT) Xbox 360 can purchase a separate HD-DVD drive to read the competing format. Whichever one comes out on top, one thing's for sure -- companies like Lions Gate can exploit the new players, and they will benefit over time as a result.

I watched Saw III on video last week, and I was impressed with its superiority to the second entry. No follow-up will ever be able to beat the shocking plot of the first flick; while the second one was a decent horror film, it didn't leave me with the same "wow" sensation that I felt after I got to the last scene in the original outing.

That's Lions Gate's biggest problem -- will it be able to keep the creative momentum going? It'll have to; Saw IV is scheduled for the fall, and it will need to knock the pants off the jaded audiences who come to see it to ensure a healthy run at the box office. According to Boxofficemojo.com, the first, second, and third entries grossed $55 million, $87 million, and $80 million in the domestic marketplace, respectively. Worldwide, they took in $103 million, $144 million, and $147 million. The reported production budgets on the pics have been steadily rising, even while the growth in the grosses has slowed. Producers will have to be careful not to spend too much money on the fourth film, especially since Jigsaw's chance of wearing out his welcome increases with each new sequel.

How far will Lions Gate take the Saw franchise? If the studio continues to see large theatrical grosses and robust DVD sales, it'll make sense to continue the series for as long as fans will have it. As shareholders wait for Saw IV, they can at least revel in the home-video success of Saw III. Horror is alive and well at Lions Gate.

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