'Avatar: The Way of Water' eyes $170 million-plus opening weekend

"Avatar: The Way of Water" is widely expected to deliver director James Cameron his first $100 million opening weekend — with industry watchers estimating the film will generate north of $170 million in domestic markets this weekend.

"The buzz on this movie is off the charts," Paul Dergarabedian, Comscore senior analyst, told Yahoo Finance Live. Dergarabedian said positive word of mouth, coupled with strong reviews (the film has an 81% score on Rotten Tomatoes), should help alleviate concerns surrounding the sequel's 3 hour and 12 minute run time.

The original "Avatar," released in 2009, secured just $77 million in its opening weekend before it went on nab $2.74 billion globally, becoming the highest grossing movie of all time.

Current presale trends suggest the sequel will follow a similar trajectory.

Director James Cameron arrives at the world premiere of 'Avatar: The Way of Water' in London, Britain December 6, 2022. REUTERS/Toby Melville
Director James Cameron arrives at the world premiere of 'Avatar: The Way of Water' in London, Britain December 6, 2022. REUTERS/Toby Melville (Toby Melville / reuters)

According to box office analytics platform EntTelligence, preview night and opening day represent only 53% of sales for opening weekend — a positive sign for long-term success as it means the movie is not "front-loaded" and should have sustained interest over time.

In comparison, 70% or more of opening weekend takes for super hero films come from preview night and opening day. Anything lower than 70% is a strong indicator of success, the platform noted.

"The movie industry needs this movie right now," Dergarabedian stressed. "We've had a slow post-summer period. 'Wakanda Forever' was number one for five weekends in a row, and now we're looking for 'Avatar: The Way of Water' to take over that mantle."

Investors will be closely watching theatrical stocks on the heels of the film's release. IMAX (IMAX) shares have fallen roughly 20% so far this year compared to a 30%-plus dip for Cinemark (CNK) and a more than 75% plummet for AMC Entertainment (AMC).

'The stakes couldn't be higher'

The Avatar sequel carried a reported production budget of $250 million-plus, which Cameron noted makes it "the worst business case in movie history," and will have to be the third or fourth highest-grossing film just to break even.

"The stakes couldn't be higher," Dergarabedian said, noting the film's rare China release will be a "big benefit" as it looks to add box office dollars.

Box Office to welcome re-release of Disney's 'Avatar' (Courtesy: 20th Century Studios)
Box Office to welcome re-release of Disney's 'Avatar' (Courtesy: 20th Century Studios)

The original "Avatar" heavily relied on foreign markets with more than $200 million of its $2.74 billion global total stemming from mainland China.

"That market has only grown since," Shawn Robbins, chief analyst at Box Office Pro, previously told Yahoo Finance. "We even saw multiple re-releases of that original film draw considerable revenue in China over the last few years. I really anticipate this is going to add a significant amount to the bottom line for 'Way of Water.'"

One risk remains China's zero-COVID policy, though recent signs have suggested a softening in that position from Beijing. Coupled with the lack of Hollywood-approved films, China's theatrical ecosystem has been a drag for U.S. films, with the country's box office down 35% compared to the same point in 2021, according to data from consultancy Artisan Gateway, cited by Variety.

"This just goes to the nebulous aspect of forecasting what's going to happen in China — whether it's the box office, government related, or pandemic related, there's so many factors in play here," Robbins said.

Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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