December 17, 2009 / 8:20 PM / 8 years ago

Fox looks for merchandising bonanza from "Avatar"

<p>Visitors wear 3D glasses as they watch a preview of the upcoming movie "Avatar" during the 40th annual Comic Con Convention in San Diego July 23, 2009.Mario Anzuoni</p>

LOS ANGELES (Reuters) - The Hollywood studio behind widely-anticipated "Avatar" is banking on the film to drive its biggest U.S. product licensing push in years, starting with toy figures and expanding to items from home decor to party goods.

The News Corp-owned Twentieth Century Fox is making that gamble even though consumers know virtually nothing about the blue, cat-like characters in "Avatar" who will be at the heart of the merchandising effort.

Fox has used its "Avatar" licensing deals, including one with Mattel Inc for toys, as a way to recoup on what is one of the most expensive films in history, costing at least $237 million to produce, analysts said.

But if the movie, which opens on Friday and tells of a soldier infiltrating an alien race, crashes at box offices, stores may be left with shelves of unpopular "Avatar" products, literally standing with their tails between their legs.

Howard Roffman, head of licensing for Lucasfilm, the company behind "Star Wars," said he would be "very nervous" to launch a retail push now, as Fox has done with "Avatar."

"The economy is not good, retailers are challenged, licensee companies are challenged, so my hat's off to people who rise to that and get a program out there," Roffman said.

Last year, the Warner Bros release "Speed Racer" bombed at box offices when it was released in May, and analysts say it crippled sales of toys tied to that movie.

But if all succeeds, Fox and its partner companies could turn "Avatar" into a major merchandising franchise, and perhaps even enter the same universe as the $18 billion retail phenomenon "Star Wars," the movie franchise that has long been an inspiration for "Avatar" director James Cameron.

IS 'THE FORCE' WITH THEM?

By moving aggressively, Fox stands to avoid what happened to "Star Wars" when it opened in 1977. Then, no toys were out when parents started clamoring for them and at Christmas, kids received empty boxes with certificates for "Star Wars" toys.

Fox sees Pandora, the extra-terrestrial globe where "Avatar" is set, as a rich fictional world that can be mined for retail products.

"In the U.S. market, this is the largest launch that we have had probably in recent memory -- if ever," said Robert Marick, executive vice president of Fox Licensing.

He declined to give specific sales projections.

For comparison, the recent film "G.I. Joe" was based on a decades-old brand that consumers already knew, and Hasbro forecast toy sales of $100 million for 2009, said Chris White, analyst with Wedbush Morgan. "'Avatar' will be a sliver of that, it will be a lot less than 'G.I. Joe,'" he said.

Since October, Mattel has been selling "Avatar" figures with an "i-TAG" that can be held near a computer's webcam. The computer scans the tag and launches an image of the character moving on-screen, or even fighting with another character.

Last month, News Corp's HarperCollins published several books on the film, including "Avatar: A Confidential Report on the Biological and Social History of Pandora." JEM Sportswear and Awake Inc launched T-shirts, sweatshirts and fashion tops.

This month, videogame maker Ubisoft released "James Cameron's Avatar: The Game." Fox hopes to one day launch home products such as, bedding, as well as costumes, party goods, toy building sets and other products, Marick said.

Still, some analysts wonder if the strange-looking characters of "Avatar" will connect with children.

Even Tim Kilpin, general manager of Mattel's girls, boys and games division, acknowledged that because the movie is new "there's going to be some ramp-up to awareness."

"We think before too much longer, a lot of people will know these ('Avatar') stories and these characters," he said.

Editing by Bob Tourtellotte

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