Star Wars: ‘May The Force’ be with Village Roadshow Limited shares this Christmas

Credit: JD Hancock

The initial reviews for Star Wars: The Force Awakens are in and so far they’re spectacular.

Often highly-anticipated films can ultimately be huge flops. Just ask Disney, which was responsible for The Lone Ranger. According to Variety it was “one of the biggest Hollywood trainwrecks of the year” in 2013. Some of the harsher critics even questioned Johnny Depp’s ability as an actor, despite his huge success in the Pirates of the Caribbean franchise.

But it seems Disney was truly onto something when it picked up Lucasfilm in 2012 for a cool US$4.05 billion, gaining the rights to the Star Wars universe in the process. In fact, some people are even suggesting it could go on to become the biggest grossing movie of all time, potentially knocking Avatar from its perch (according to Box Office Mojo, Avatar took in US$2.79 billion at the box office).

As highlighted by CNBC, the new Star Wars film’s success will largely depend on “word of mouth and whether fans love it enough to watch it multiple times through the new year.” Other films such as Spectre and Hunger Games: Mockingjay Part 2 have already been released weeks ago and are thus unlikely to rival the latest Star Wars film’s dominance on the big screens and, as far as early reviews go, it could well attract die-hard Star Wars fans again and again.

Of course, all of this is great news for Disney (and, of course, for fans of Star Wars), but it could also be an early Christmas present for Australian-based cinema operators such as Village Roadshow Ltd (ASX: VRL) and Amalgamated Holdings Limited (ASX: AHD).

As popular as the film is expected to be around the globe, experts are also suggesting it is shaping up to be the second largest, if not the largest box office hit ever in Australia, according to The Sydney Morning Herald.

While some say it will come second behind Harry Potter and the Deathly Hallows Part 2 for the movie with the biggest opening week (the last Harry Potter film took in $29.3 million), others say it could generate sales as high as $40 million in the first seven days.

The SMH also reported that Village Roadshow was putting on extra staff in ‘anticipation of their biggest weekend ever’.

While there certainly aren’t any guarantees when it comes to forecasting box office results, Star Wars: The Force Awakens could be a boon for both Village Roadshow and Amalgamated Holdings. The pair’s share prices have risen 3.8% and 4.4% today, respectively, compared to a 1.9% rise for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Walt Disney. Motley Fool contributor Ryan Newman owns shares of Walt Disney. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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