Avengers: Endgame has surpassed all expectations, both in terms of critical reception and box office performance. The latest blockbuster from Marvel Studios currently
sits second on the list of world's highest grossing films, behind only James Cameron's
Avatar.
With a global haul of over $2.3 billion (and counting) worldwide and growing, it's understandable that investors are enticed by
Avengers: Endgame's box office performance. But during this week's earnings call, The Walt Disney Company executives tempered expectations, citing high production costs as an offset to these record-breaking numbers.
"Given the size of the cast involved and anyone who's seen it, knows that the cast was extremely large, and the cost to produce a film of that scale of magnitude and length, while we expect the results for this film to be terrific, they will be tempered somewhat by the cost structure," said Christine McCarthy, Senior Executive Vice President and Chief Financial Officer.
"And I said the exact same thing as it related to Infinity War."
Disney hasn't, and probably won't, reveal exactly how much
Avengers: Endgame cost to make, but the belief is that it's one of the company's most expensive films. Conservative estimates put a price tag of anywhere between $350-$400 million to produce. That's also not including marketing costs for the blockbuster film, which is estimated to have run around another $150 million. Suffice to say,
Avengers: Endgame was expensive.
And it's true that in the past, Disney's Studio Entertainment revenue has done little to move the needle for the company's stock. Even with the success of
Avengers: Infinity War ($2.048B)
boosting the segment's revenue to $2.9 billion in 2018, the 20 percent increase year-over-year had little to no impact on the stock.
In fact, Disney had been trading sideways for years until the company finally unveiled its big plans for Disney+ earlier this month. The release of
Avengers: Endgame did push the stock to all time highs, but the price has since settled back down to where it was following the Disney+ news at Investor Day.
While box office records make for great headlines, they doesn't always signifty record profits.
Avengers: Endgame will undoubtedly turn a profit and boost Disney's bottom line, but what will ultimately sway investors is the performance of Disney+. Speaking of,
Avengers: Endgame will
arrive on the streaming service on December 11.