The company that owns Redbox, despite the rolling success of "Super Mario," has failed to meet Wall Street forecasts and is suffering a stock drop

Web-based movie rental service Redbox and its parent company Chicken Soup for the Soul Entertainment are facing an unfavourable situation despite a successful "Super Mario" rental show. Universal/Illumination Studios' film division for the Super Mario Bros. game topped the annual home entertainment charts, earning $1.36 billion worldwide. However, realising the $375 million deal between Chicken Soup and Redbox proved to be a challenge for the company.

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Chicken Soup reported total revenue of $79.9 million in the second quarter of this year, nearly double the same period the previous year ($37.6 million), thanks to the Redbox takeover and the introduction of thousands of rental kiosks across the country. Still, those results fell well short of Wall Street's forecasts, which expected $120.1 million. The company's losses were also higher than expected, coming in at $1.50 per share, up from $1.39 a year earlier, but beating analysts' forecasts of -$1.72.

In a conference call with analysts to discuss the quarterly results, CEO Bill Rouhana and CFO Jason Meier announced near-term cost-cutting and cash growth measures. The plan is to save around $15 million by optimising the digital and distribution business. At the same time, licensing deals worth about $30 million were rejected during the quarter because they would have generated profits in the long term but not cash flow in the short term, Rouhana said.

Despite the overall volatility, the Super Mario Bros. game was also released on Redbox in the quarter, and the animated film's appearance in May, which grossed $1.36 billion at the global box office, was heralded by the company as the most profitable week in Redbox's history.