Shrek's Fourth and Final Stand

Shrek Forever After
Shrek Forever After

Expectations were high for "Shrek Forever After" based on the big debuts of the last two films in the franchise and the power of pricier 3-D tickets to boost the box office.

The film brought in $71 million, dominating the U.S. box office as the fourth highest animated movie opening ever.

But this fell short of projections, and the number of tickets sold was down 59 percent from the prior Shrek's debut weekend.

Perhaps franchises and 3-D aren't worth as much as Wall Street expected.

A half dozen DreamWorks Animation analysts issued downgrades and critical notes on the company, some reducing stock estimates on the film's disappointing debut. This is the first time an animated franchise has released a fourth film; William Blair analyst Ralph Schackart said that's creating "franchise fatigue."

This was the first Shrek installment in 3-D, which accounted for over 60 percent of the business. But BTIG Research analyst Richard Greenfield points out that with the movie available on more 3-D screens, more people opted to see this movie in 2-D than the studio's prior release, "How to Train Your Dragon." And with the price of 3-D tickets rising—some as much as $19 at Manhattan Imax theaters, Greenfield asks the question: "Is the novelty of 3-D wearing thin?" Theaters must be closely watching their pricing model and theatrical performance to see how much is too much for a movie ticket.

But the good news for DreamWorks Animation is the fact that Shrek is poised to have strong staying power.

In March the studio's 3-D "How to Train Your Dragon" had a disappointing debut, grossing just $44 million its opening weekend. But despite all expectations to the contrary, "Dragon" held up unusually well, grossing $211 million in the US and $433 million worldwide. Though analysts expect movies to open with a big pop and then peter off, with animated movies in particular, we may see a shift towards a long, slow burn at the box office. Plus, Shrek won't be facing any child-friendly competition in theaters until Toy Story 3 hits the big screen June 18.

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