An unlikely player has emerged in computer animation, as Universal's Despicable Me rocked the box office over the weekend.
General Electric's (NYSE: GE) studio scored an estimated $60.1 million in ticket sales during the film's first three days of screenings at local multiplexes. It's a surprisingly strong showing, selling more admissions than the silver and bronze medalists combined.
This is Universal's first animated theatrical feature to be released in 3-D, and its success comes at an appropriate time. RealD, the country's leading licensor of 3-D screens, is going public this week.
Exhibitors have been upgrading their theaters to accommodate premium-priced 3-D screenings. The recent ramp-up of IMAX (Nasdaq: IMAX) installations has been helped by the growing popularity of enhanced 3-D cinematic makeovers. If moviegoers don't mind paying a premium for a three-dimensional release, they may as well see it on IMAX's superior platform.
The surprising success of Despicable Me should help the RealD IPO, despite the 3-D specialist's history of red ink. If a studio that isn't Disney (NYSE: DIS) or DreamWorks Animation (NYSE: DWA) can score an animated summer blockbuster in 3-D with a brand-new property, the movie theater industry has to be thriving.
Disney and DreamWorks Animation have already unloaded their big summertime computer-animated flicks. The results were mixed. Disney's Toy Story 3 has taken in more than $340 million in domestic ticket sales, topping Finding Nemo to become Pixar's highest grossing release. DreamWorks Animation's Shrek Forever After, on the other hand, is shaping up to be that studio's least successful entry in the Shrek franchise. These figures aren't adjusted for inflation, so it may downplay Disney's success but only adds insult to computer-rendered injury for DreamWorks Animation.
GE played this round perfectly. Despicable Me was promoted aggressively in recent weeks, even teaming up with Best Buy (NYSE: BBY) for placement in circulars and a "movie mode" app that translates what the minion characters say during the film's end credits. It was a bold bet for a partnership, given that Best Buy obviously won't be selling the DVDs for several more months. DineEquity's (NYSE: DIN) IHOP even updated its menu to feature the film's Minion Menu items.
The studio plastered its characters in unlikely places, and the move clearly worked in familiarizing audiences with a rookie franchise. Tack on a voice cast aiming for hipsters with Steve Carell, Russell Brand, and Jason Segel and it was the perfect blanketing strategy on Universal's behalf.
With favorable reviews likely to keep multiplex crowds coming over the next few weeks, don't be surprised if Despicable Me 2 is in the works in a couple of years.
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