The posters and trailers promise The Hobbit: The Battle of the Five Armies to be "the defining chapter" of not just the Hobbit trilogy but Peter Jackson's entire Middle-earth saga. The film's backers are leaving nothing to chance. This is the film audiences can't afford to miss, the one that will connect The Hobbit to The Lord of the Rings and make sense of the entire saga. It will be fans' last trip to Middle-earth with Jackson as their guide. The titular clash promises to be one for the ages - an epic five-way bout involving dwarves, goblins, elves, eagles and bats, with Bilbo and Gandalf at the centre. And although the first reviews have declared The Battle of the Five Armies to be a victory for Jackson, box office predictions suggest both he and Bilbo will be leaving the battlefield with a limp.

Watch: Battle of the Five Armies premiere

Box Office Mojo, the movie industry bible for box office figures, predicts The Battle of the Five Armies will take just US$235 million at the US box office, an all-time low for the Rings franchise. Not only that, it looks as if it will be the least attended of the six films. That's quite a fall from the dizzying highs of the Lord of the Rings. That trilogy grossed US$2.917 billion at the box office, won 17 Oscars, including best director for Jackson, is adored by critics and audiences alike, and boosted New Zealand's tourism industry. But The Hobbit trilogy has been a different beast altogether. It has cost almost three times as much as the Lord of the Rings but hasn't fared as well - critically or financially. So was the return to Middle-earth worth it?

MIDDLE-EARTH BY THE NUMBERS - SCROLL DOWN

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It is important to remember just how great the demand was for a Hobbit movie after The Return of the King left the multiplexes. Like JRR Tolkien's books, Jackson's fantasy epics managed to transcend their genre roots and imprint themselves on popular culture in a way not seen since Star Wars. Audiences wanted to return to Middle-earth, they wanted Jackson to film the equally beloved Hobbit. Jackson himself was wary, and exhausted. He couldn't quite see how the whimsical tone of The Hobbit would fit into the dark, serious world of The Lord of the Rings. Bilbo's encounter with the dragon Smaug was a fairy-tale at heart.

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But Jackson's subsequent fallout with New Line, which had financed The Lord of the Rings, put him out of the picture while a complicated fight over who actually owned the rights to film The Hobbit seemed to consign the project to development hell. No more hobbits, no more Gandalf. And then suddenly in 2007, the rights issue was solved and Jackson was back on board, as a producer. The Hobbit was to be split in two, with Pan's Labyrinth and Hellboy director Guillermo del Toro at the helm. Fan expectations were high, the studios eyed more billions. And then in 2010 the project hit a road block when MGM, which held the rights to The Hobbit and was co-financing the films with Warner Bros and New Line, went bankrupt. Del Toro left and The Hobbit was once again in limbo. Months later MGM was bailed out and the project was back on, with Jackson directing. To keep the films in New Zealand, the Government rewrote labour laws, outraging unions and offered generous tax breaks - NZ$153 million. Everything was finally set for a repeat of the Rings success. A trailer for both films in 2011 had everyone cheering. Gandalf was back, so too was Cate Blanchet's Galadriel. And Martin Freeman was a very respectable Bilbo Baggins. Critics predicted The Hobbit would almost certainly nab Jackson Oscar nominations for best picture and best director. And then, the rumblings began. (Article continues after the graphic.)

In April 2012 Jackson showed footage of The Hobbit to exhibitors. He had trumpeted his decision to film the saga at 48 frames per second - twice the standard frame rate - as a revolution for movie-goers but some of those who saw the footage likened the experience to watching BBC dramas from the 1970s. Then in July of the same year, he announced that the two films would become three. The rumblings increased. Fans of Tolkien's book baulked at the idea of stretching 320 bright and breezy pages into a nine-hour trilogy.

The studio chiefs were convinced Jackson's decision was the right one. The Lord of the Rings franchise was a lucrative one, a compelling reason to keep it going as long as possible (Warners' decision to serve up the final Harry Potter book in two chunky instalments earned the studio an extra billion dollars at the box office).

The reviews for The Hobbit: An Unexpected Journey zeroed in on the film's lengthy running time. Many felt that Jackson turned in a bloated, uneven film that strayed too far from the spirit of the book. All Oscar talk immediately evaporated. The box office receipts more than made up for that. The film grossed US$1.017 billion worldwide. Included in that total was NZ$11.77 million from New Zealand, making it New Zealand's second highest-grossing film, with Avatar number one.


Galadriel gives Gandalf the kiss of life in The Battle of the Five Armies. Photo / Warner Bros/ New Line/ MGM

Aragorn and Arwen from The Lord of the Rings. Their romance helped the films transcend their genre roots. Photo / New Line

But the US$1.017 billion figure isn't quite the victory it appears to be. Although An Unexpected Journey out-grossed the first two Rings movies, and was in reach of matching The Return of the King, it actually lags behind all three Rings films, when inflation is taken into consideration. Ticket prices have risen dramatically over the last ten years - especially for 3D films like The Hobbit - but audience attendance figures have fallen. In the US, 32.3 million people saw An Unexpected Journey at the cinema, almost half as many as saw The Return of the King.

The tepid response to An Unexpected Journey dented the second Hobbit film, The Desolation of Smaug, which grossed a franchise low of US$258 million in the US and US$958 million worldwide. Critically Smaug fared better, scoring a 74% rating on Rotten Tomatoes, ten points more than An Unexpected Journey, but it was still well short of the 91%-96% achieved by the three Rings films.

To make matters worse rising production and marketing costs will have eaten into the profits (on average studios recoup just 50% of the gross box office receipts). The Lord of the Rings trilogy had a reported budget of US$280 million. Adjusted for inflation that figure is US$372 million. Financial documents disclosed in October showed that NZ$934 million (US$733 million) had been spent on all three Hobbit films. The financial reports, for a separate company set up by Warner Bros to run the films, only go up to March of this year so further costs could push the figure higher. It's not even clear if marketing costs, which for a typical Hollywood blockbuster can run well over US$100 million, are included in the total.


Peter Jackson directs Martin Freeman (Bilbo) and Ian McKellen (Gandalf). The shoot for the the Hobbit movies was a mammoth one. Photo / Warner Bros/ New Line/ MGM

Tom Shone, a former film critic for The Sunday Times and author of Blockbuster: How Hollywood Learned To Stop Worrying And Love The Summer, believes the reason the Hobbit hasn't fared as well as the Lord of the Rings is that it essentially offers more of the same: "My general feeling is that the Hobbit movies have gone down to their core fan base. And that's really the difference between the figures. The Lord of the Rings movies managed to transcend their fan base. Couples would go on dates to see the new Rings movie. Whole families would go. I'm not seeing the same sort of excitement for the Hobbit movies.

"For the mainstream audiences that went to see the Lord of the Rings, I think that once the film won its Oscars, there was a sense of, 'That's good - what now?' When the Hobbit trailers popped up, I think Orc fatigue set in. The heaving grey armies amassing in the distance don't look sufficiently different to get mainstream audiences out of their homes and into the cinema."


Orc fatigue? The armies of darkness gather in the Hobbit finale. Photo / Warner Bros/ New Line/ MGM

Box Office Mojo analyst Ray Subers has made the same argument. "Outside of hard-core fans, though, it doesn't seem like there's much excitement surrounding this finale," he wrote in his analysis of The Five Armies' box office prospects.

He noted that although Smaug was better received than An Unexpected Journey, and that franchise finales tend to do pretty well, The Battle of the Five Armies faces some stiff competition, unlike the first two Hobbit movies. "Noting the lukewarm reception of the first instalment, other studios programmed some very competitive titles: Exodus: Gods and Kings, Night at the Museum: Secret of the Tomb and Into the Woods should all chip away at this movie's audience."

Paul Dergarabedian, of box office analysts Rentrak, says the Hobbit franchise still has "the capability to approach US$1 billion at the global box office and by any measure that is an impressive feat".


The dragon Samug is unleashed in the first half of The Battle of the Five Armies. His presence in the second Hobbit film was a highlight for audiences. Photo / Warner Bros/ New Line/ MGM

He predicts the global haul will, like the previous Hobbit films, provide the lion's share of the box office. "These films are truly a worldwide phenomenon and thus they have to be analysed from that perspective."

The Herald reached out to Warner Bros and New Line for comment on the predictions but the studios refused to comment.

It's worth noting that the Hobbit films are not the only blockbusters to suffer box office fatigue. Revenue for the US market, which is still by far the biggest movie market in the world and from which studios command a bigger share of the box office receipts. hit an eight-year low this year, down 15 per cent on 2013. The latest Transformers and Spider-man films hit franchise lows in the US market. So steep was the decline for Spider-man that plans for more sequels have been put on hold. Even The Hunger Games: Mockingjay Part 1, which many in Hollywood were hoping would turn around a dismal year at the box office, is lagging behind the last Hunger Games movie, Catching Fire, in the US. Worryingly, it is also behind Catching Fire in several key international markets, such as Russia.

Figures show that for the majority of blockbusters of the last decade, the US market is shrinking, with international markets making up the lion's share of the box office gross. The Chinese setting for the final showdown in Transformers: Age of Extinction was aimed at boosting the film's takings in China.


Under pressure: The Amazing Spider-man 2: Rise of Electro was one of this year's high-profile box office casualties. Photo / Sony

Dergarabedian says: "This has been a roller-coaster of a year at the box office and some of the films were expected to knock it out of the park have in some cases performed below expectations. The issue is that the bar has been raised so high that it's almost impossible to meet these elevated expectations."

Walt Disney Studios chairman Alan Horn recently summed up the problem Hollywood now faces. Audiences now have a multitude of entertainment options to choose from, many of them streaming straight into their living rooms. "You have to answer two critical questions: Do I have to see it now? And do I have to see it on the big screen?" Horn told the Hollywood Reporter. "If the answer is 'no' to either, you are in trouble."

Shone comments: "Cable TV channels such as Showtime and HBO have basically taken over the role that used to be played by movies, providing serious dramas for adults. That audience doesn't want to go out to see Spider-man 2, 3 or 4 but would rather stay in and watch The Affair or Homeland."

Films that have done well in both the US and international markets have been ones that offer up something new for the viewer, much like The Lord of the Rings did when it came out. "Interstellar is a good example of an original idea sneaking through and connecting with audiences," Shone says.

"The basic paradox of Hollywood is that audiences still want to see something new and will reward something new in big numbers, but Hollywood is a place which is geared towards stamping out anything new and original to minimise risk for investors."

He adds: "Hollywood has become very reliant on not just blockbusters, but mega-blockbusters, films like the new Star Wars or Avatar or Lord of the Rings, which are billion-dollar-plus movies that have a huge global reach. You can see box office analysts in the US counting on single movies to rescue the year. They are pinning their hopes on the Hobbit or the Hunger Games to turn things around. Blockbusters have become what movies used to be and mega-blockbusters are the new blockbusters."


The character of Gollum has linked the Hobbit trilogy to the Lord of the Rings. Photo / Warner Bros/ New Line/ MGM

No one could argue that Jackson made The Hobbit for a pot of gold. An Unexpected Journey and The Desolation of Smaug are without a doubt Peter Jackson movies, and share the same high production values as the Rings movies. Many of the reviews for The Battle of the Five Armies praised Jackson's devotion to the source material. Variety noted that it was "easier now to see the entire Hobbit project as a labour of love on Jackson's part, rather than a descent into crass box-office opportunism".

Dergarabedian believes that the decision to turn what were initially two films into three has been worth it. "Splitting films has its own benefits and downside. You get to keep the franchise train rolling along for a longer period, but you may give up some dollars on the front end. When you count up the billions in revenue vs. the millions in production and marketing costs the studios have made the right decision."

For New Zealand's tourism industry, there is no doubt the decision to return to Middle-earth has been the right one.

Although many critics have questioned the wisdom of handing out government subsidies to a giant Hollywood studio, especially when movie and TV production contributes less than one per cent of GDP, The Hobbit and Rings movies have had a transformative effect on tourism, New Zealand's second-biggest earner after dairy.

Christine Adair, senior communications adviser for Tourism New Zealand, said that the return to Middle-earth has been more than worth it. "The Hobbit trilogy has put New Zealand's stunning landscapes centre stage. More than a fifth of holiday visitors to New Zealand currently participate in some type of Hobbit experience - either visiting Hobbiton or a location used in the films or going on a Hobbit sightseeing tour," she said.

"In 2000, before the first Rings movie came out, New Zealand had 1.78 million international visitors for the year. In 2013 we had 2.71 million - a 52 per cent increase. Last year, just after the first Hobbit movie came out, there was a 10 per cent increase, which is a phenomenal growth rate.

"Thirteen per cent of holiday visitors to New Zealand cited the Hobbit as one of the reasons they chose New Zealand, which was worth around $567 million last financial year. In terms of value to the economy overall, tourism is New Zealand's second largest export earner, currently contributing $10.3 billion or 15.3 per cent to New Zealand's total exports."

The Battle of the Five Armies - What the critics say

Bilbo stares down the forces of evil in a poster for The Battle of the Five Armies. The marketing for the film has played up the epic clash. Photo / Warner Bros/ New Line/ MGM

"It's pleasing to see that Jackson didn't let the most persistent criticism of the LOTR trilogy - that it had an overly drawn-out ending - push him towards abruptness in concluding this story. There's an appropriate sense of closure in the denouement."
- Dominic Corry, New Zealand Herald

"While The Battle of the Five Armies is unlikely to repeat the Oscar sweep that greeted the conclusion of Jackson's first Tolkien trilogy, in truth it is just as enjoyable as each of the five films that came before it."
- Andrew Pulver, The Guardian

"It's easier now to see the entire Hobbit project as a labour of love on Jackson's part, rather than a descent into crass box-office opportunism."
- Scott Foundas, Variety

"The bloom has come off Orlando, whose main achievement as Legolas - other than some ridiculous mid-air running up collapsing masonry - is to illustrate perfectly what Joey Tribbiani from Friends called 'smell the fart acting'."
- Tim Robey, UK Telegraph

From the archives

Hobbit reviews:

Lord of the Rings reviews: