DreamWorks Animation SKG (NASDAQ: DWA) is a digital animation film studio that that develops and produces computer-generated, or CG, animated feature films. The company has released a total of 18 animated feature films, 11 of which have been CG animated feature films, and one direct-to-video title. Shrek the Third, Shrek 2 and Madagascar were the highest-grossing animated films in the domestic box office in their respective years of release, and Shrek 2 remains the highest-grossing animated film, as well as the third-highest grossing film, of all time in the domestic box office. As of 2010, DreamWorks is focused on releasing three animated films, How to Train Your Dragon, Shrek Forever After and Megamind.

Due to the unpredictability of the box office, DWA seeks to manage its risk ensuring that one of its releases is a sequel. ^[1]. Sequels are inherently less risky because of their proven fan base. However, with only about a handful of movie releases per year, a box-office flop could still have a major negative impact on the studio's annual earnings and future revenue ^[2]. Dreamworks which derives 50% of its revenue from DVD sales could be significantly impacted by continuing declines in the DVD market.

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