Dreamworks has had a rough time lately. While in past years it, along with Pixar, dominated the animated film scene, Dreamworks has seen disappointment with its recent release of “Penguins of Madagascar, ” according to Variety magazine. The latest film in the Madagascar series was expected to earn $45-$48 million over Thanksgiving weekend, but it brought in only $35 million. While it might be too soon to despair and viewers might increase—it may have healthy performance abroad–if it fails, it will have been the 4th out of the last 6 Dreamworks films with lackluster box office sales.
The company’s stock hasn’t been too hot either. Shares dropped 9% on Monday. Dreamworks made no secret of the fact it was trying to sell itself, but the two attempts did not pan out. After proposed deals fell through with Softbank and Hasbro, the company lost some clout on Wall Street.
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This comes at a time when Disney is getting back into the animation game in a huge way with the success of “Frozen.” Universal Illumination Studio and Fox’s Blue Sky saw the hugely popular “Despicable Me” and “Ice Age.”
The company is vulnerable because it releases only a few films a week and relies on sequels and spin offs to succeed. The flat reception of “Penguins of Madagascar” may show this strategy isn’t working, CEO Jeffrey Katzenberg can either radically transform the company or try again to look for a buyer. However, the latter move could run into headwinds, as the recent rejections of a takeover deal and the slow performance of the company might not give it a hearty valuation.