Second highest-grossing film? Third? Analysts predicting how much The Walt Disney Co. (NYSE:DIS) will make in box office revenues from Star Wars: The Force Awakens coming out on Dec. 18 are missing the point that box office revenues are just one part of the success of this movie franchise and Disney is just one beneficiary. Here's why toys, theme parks, and video games -- as well as an incredible box office debut -- could make Star Wars the highest revenue movie ever.
Where will Star Wars land in box office history?
With all of its hype, Star Wars VII is predicted by most analysts to either rank No. 2 or No. 3 on the list of highest-grossing films of all time. Morgan Stanley analysts predict the film to bring in around $2 billion globally, which would put the film behind Avatar at $2.8 billion and Titanic at $2.1 billion in box office revenue.
Other analysts have predicted that the latest Star Wars movie will break the all-time first-day box office record for a December release, crushing the current around $75 million by potentially even doubling it. While the box office revenue that Star Wars VII pulls in does matter for investors, the bigger question is what the profitability of this film looks like in total -- and it looks like a lot.
3 reasons it could be the most lucrative movie ever
- Theme parks
Coming in 2016, Disneyland in California CA and Disney World Resort in Florida will open their expansive new Star Wars-themed lands. Disney CEO Bob Iger said, "We are creating a jaw-dropping new world that represents our largest single themed land expansion ever. These new lands at Disneyland and Walt Disney World will transport guests to a whole new Star Wars planet, including an epic Star Wars adventure that puts you in the middle of a climactic battle between the First Order and the Resistance."
Theme parks are Disney's second-largest segment by revenue at $16.2 billion in fiscal year 2015, more than twice as large as the studio entertainment segment responsible for making the actual Star Wars movie. Theme park revenue is also growing faster, up 7% year over year in FY 2015, compared to 1% for studio entertainment. These Star Wars attractions are already creating a lot of buzz, which is likely to help that segment revenue continue to climb.
- Consumer products
Demand for Star Wars merchandise already looks ready to be as good or better than the success of Frozen toys, which has led to incredible consumer product segment growth for Disney over the last two years. Disney held a "Force Friday" global Star Wars product release on Sept. 4 and the response was so high that most retailers sold out of stock quickly, causing a small backlash of fans who didn't get those toys early enough.
Hasbro (NASDAQ:HAS)holds the exclusive license for Star Wars toys and is preparing for massive pre-orders from major retailers for Star Wars products, and already sold out of its first batch of the remote controlled BB-8 robots shown here. Disney will make a lot of money from its own products, but these licensing deals also hold a lot of potential revenue for Disney. Hasbro reportedly paid $225 million for the exclusive rights to produce Star Wars toys, though that's not even accounting for all of the licensing for Star Wars branded cereal, apparel, and other consumer products.
Electronic Arts (NASDAQ:EA) is another company benefiting from the Star Wars empire. The company has paid for rights to produce Star Wars video games, and on Nov. 17 released its latest Star Wars: Battlefront, a multiplayer game for nearly every gaming console and online, selling for $60.
EA expects it could sell up to 13 million units of the game by March 2016. For Disney, it's not just this EA licensing deal that is making money -- there are now Star Wars themed Lego, Angry Birds, and other games, and Disney has produced online and mobile app games of its own.
And this is just the beginning as Disney has already announced dates for the next few Star Wars movies including a new Star Wars spinoff movie in May 2016, Star Wars VIII coming May 2017, and Star Wars IX coming some time in 2019. For all of the analysis on Disney regarding its decision to purchase Lucasfilm in 2012 and especially recently leading up to this movie release on Dec. 18, the total profitability of Star Wars to Disney still looks undercounted.
Bradley Seth McNew owns shares of Hasbro and Walt Disney. The Motley Fool owns shares of and recommends Hasbro 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.