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Imitation is the sincerest form of Hollywood flattery. But it could be hurting one of the movie industry’s most bankable genres: computer-animated films.

A growing number of executives and analysts are warning of a glut of these productions, as a field that once included two or three releases a year has swollen to a dozen.

“You’re just seeing too many [computer-animated] movies in the market, and the average box office . . . is coming down,” said Peter Chernin, president of News Corporation, whose Blue Sky studio released one of this year’s most successful computer-animated films, Ice Age 2.

Studios have been lured into the field by the enormous success of pioneer Pixar, which burst on to the scene in 1995 with Toy Story, and was acquired by Disney this year for $7.4bn. Another early entrant, DreamWorks Animation, boasts the third highest grossing film in North American box office history with Shrek 2.

Computer-animated films have not only generated big numbers at the box office but also tend to have higher margins than other genres because the cost of talent is much lower. The computer technology has spread to animators around the world.

The problem, say analysts and executives, is the limited number of viable opening weekends for such films when their school-age audience is on holiday.

“Invariably, the rash of CGI-animated films is going to dampen the appetite for the films,” Jessica Reif Cohen, analyst at Merrill Lynch, concluded in a recent report.

So far, three computer-animated films rank as disappointments this year. Doogal, distributed by The Weinstein Company, took in just $7.3m; Disney’s The Wild managed only $31m; while Warner Bros’ The Ant Bully, released a week ago, does not appear to have strong legs.

Even the apparent successes appear to be suffering from increased competition. Although Pixar’s Cars has taken more than $234m so far, it is still trailing itspredecessor, The Incredibles, and falling short of Wall Street expectations.

“It should have opened a little bigger, and it should have lasted a little longer,” said Dennis McAlpine of McAlpine & Associates, a media research firm.

Similarly, the more than $150m racked up by DreamWorks Animation’s Over the Hedge, which had less than a month in the cinemas before Cars roared up, has also disappointed analysts.

While Rich Greenfield of Wall Street analyst Pali Research questions Disney’s decision to pay a premium for Pixar given the crowded market, the Magic Kingdom remains confident of its purchase.

“We’ve seen episodes like this before where many, many people got into the animation business,” said Tom Staggs, Disney’s chief financial officer, referring to the imitators in the late 1990s that tried to copy the studio’s success with hand-drawn cartoons such as The Lion King.

While Disney remains committed to computer animation, Mr Staggs was not convinced about other studios. “I don’t know if everyone will stay in,” he said.

Copyright The Financial Times Limited 2017. All rights reserved.
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