Cars 2's Merchandise Bonanza

Today Disney opens 'Cars 2' in over 4,100 theaters, making it Pixar's widest-ever launch. There's little question that the film will win the U.S. box office this weekend — it's expected to gross $50 to $55 million. But that's less than the first 'Cars' film, despite inflation and the fact that this one is showing in pricier 3D.

The first film wasn't one of Pixar's better performers, and this sequel has drawn more negative reviews than Pixar films usually do. But the movie is just one tiny piece of 'Cars' importance to Disney's bottom line.

Cars 2
Source: Disney
Cars 2

'Cars 2' is already a merchandise bonanza for Disney, and is on track to continue minting money for the media giant.

Since the 2006 film it's already generated $10 billion in global retail sales.

Despite the fact that this brand is five years old, NPD reports that "Cars: The Movie" was the 6th biggest franchise from September 2010 through March 2011 for kids age 0-14. NPD describes Cars as having "remarkable staying power," saying that it's unusual for a movie license to actually grow licensed toy sales four years after its theatrical release.

Now Disney plans to drive its car machine to the next level, with 300 'Cars 2' toys, plus everything from Cars-branded backpacks and kids bedding to macaroni and cheese. 'Cars 2' is even boosting Mattel , with BMO analyst Gerrick Johnson rating the stock "over perform," saying that 'Cars 2' merchandise is off to a strong start. Disney says 'Cars 2' is on track to be the largest licensing program in industry history, topping the $2.8 billion in retail sales from 'Toy Story 3' products last year.

But is there too much of a gap between the high merchandise sales and the low reviews? (Just 36 percent on Rotten Tomatoes). Cowen & Company analyst Doug Creutz describes the sequel as a movie Disney "couldn't afford not to make given the money that was on the table." But he also questions whether merchandise played too large a role in the decision to make a sequel — whether Pixar didn't flex its usual creative muscles.

Either way, 'Cars' will continue to be a massive brand, which Disney will continue to push across multiple platforms to maintain momentum for its investment. Disney's been airing "Cars Toons" on the Disney Channel to keep the characters top of mind. And 'Cars' is the centerpiece of Disney's $1 billion renovation of its California Adventure park in Southern California. The better this movie does, the more fuel for the rest of the 'Cars' revenue engine. But even if the film's not a runaway hit, the brand should continue to drive massive toy sales.

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