Jan 22, 2023 - Economy

Avatar sequel becomes 6th film ever to surpass $2B in global sales

Photo: Disney

Disney's highly anticipated Avatar sequel "The Way of Water" has surpassed $2 billion in global box office sales, according to Comscore, clearing director James Cameron's self-imposed benchmark to declare the film profitable.

Why it matters: Investors were initially skeptical that the film would perform as well as the original, which hit the $2 billion mark at the end of January 2010 — six weeks after its debut. But the sequel is now pacing ahead of the first title and is on track to become one of the highest-grossing films of all time.

  • The film is the highest-grossing movie of 2022, surpassing "Top Gun: Maverick," which earned $1.48 billion at the global box office last year.
  • It's held the top spot for domestic box office sales for six weekends straight since the film debuted last December.

Zoom out: "The Way of Water" has become only the sixth movie in history to pass $2 billion in global ticket sales and will soon overtake "Avengers: Infinity War" ($2.05 billion), "Star Wars: The Force Awakens" ($2.07 billion) and Cameron's "Titanic" ($2.1 billion) to become the third-highest grossing movie ever.

  • The first “Avatar” overtook “Titanic” to become the highest-grossing film ever during its initial run in 2010. It was surpassed by “Avengers: Endgame” in 2019, but took back the top spot after multiple re-releases added to its total, bringing its worldwide box office sales to more than $2.9 billion to date.

Between the lines: Whether "The Way of Water" will ultimately surpass the original is unclear.

  • "Hitting $3 billion is akin to breaking the box office sound barrier, and though if anyone has the track record to get to that milestone, it is indeed Cameron," Comscore senior media analyst Paul Dergarabedian told Axios.
  • Still, "that’s a tall order considering the enormity of that task, particularly given the current weekend global gross of $76 million, and how many more of these types of performances it would require to get to that unicorn of a revenue milestone," he added.

Be smart: The film's success also means that the franchise is likely to live on past its second installation.

  • “It looks like with the momentum that the film has now that we’ll easily pass our break even in the next few days, so it looks like I can’t wiggle out of this and I’m gonna have to do these other sequels,” Cameron told CNN's Chris Wallace earlier this month. “I know what I’m going to be doing the next six or seven years.”
  • Cameron has three additional sequels planned after "The Way of Water."

By the numbers: "The Way of Water" and the original "Avatar" both debuted on the third weekend in December in 2009 and 2022, respectively.

  • "The Way of Water" was Cameron's first movie to make $100 million in its opening weekend in the U.S., though its $134 million debut fell short of analysts' expectations, which made the film initially feel like a disappointment.
  • But it outpaced its predecessor each week since the opening, even as it suffered larger week-over-week declines compared to the first "Avatar."
  • The first "Avatar" is the only film to top $250 million in Imax sales. "The Way of Water" is currently the second-highest in Imax history with over $227 million.

Yes, but: What should have added to the film's success was its availability in China, which granted "The Way of Water" permission to be released in the country early enough to allow distributors to do some marketing in the region.

  • The Chinese release was a critical milestone for Disney, considering China had been blocking most other Disney films from the country for the past two years.
  • But continued COVID-19 lockdown drama in the region has prevented "The Way of Water" from reaching its potential. The film is expected to bring in $220 million in Chinese ticket sales before it exits theaters towards the end of January. The original made around $265 million in China 13 years ago.

The big picture: A lot is riding on the success of "The Way of Water" as an indicator of the overall health of the box office in wake of the pandemic-driven shift to streaming.

  • In North America, the box office earned roughly $7.4 billion last year, down 34% from 2019 and down 37% from its all-time high of $11.8 billion in 2018.

What's next: Along with "The Way of Water," strong performances from horror film "M3GAN" and "Puss in Boots: The Last Wish" has given the theater industry optimism that 2023 will be better than last year.

  • Highly anticipated third installments for Marvel's "Ant-Man" and MGM's "Creed" franchises come out in February and March, which should further wake up the box office from its pandemic-era doldrums.
Data: Comscore; Chart: Axios Visuals
Data: Comscore; Chart: Axios Visuals

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