600 staff let go after Happy Feet 2 flops

Animation sequel turns into disaster for studio after tanking at the U.S. box office

Happy Feet 2’ must have seemed like a sure thing to studio bosses.

A follow-up to the original box office hit, which nabbed the Oscar for Best Animated Feature in 2006, it had family appeal, an existing fan-base and - most importantly - tap-dancing penguins.

[See more: A-list stars' bigest flops]

However, after unexpectedly tanking at the box office, the animation has turned into an epic disaster for Dr D Studios; the digital production company behind the film.

According to IF magazine, the Sydney-based company has been forced to lay off around 600 of its near-700-strong staff next month, just before Christmas.

Happy Feet 2’ is not even out in the UK yet, but it’s flopping badly in the states. It opened with a respectable-ish £13.7 million, but has only made another £5 million worldwide so far.

The big problem was the enormous budget. According to sources it went £32 million over budget to an estimated £87 million. Word is studio Warner Bros. also spent huge sums marketing the film, anticipating a huge hit.

Going up against ‘The Twilight Saga: Breaking Dawn – Part 1’ must also have harmed its prospects.

[See more: Brad Pitt reveals favourite football team]

Dr D Studios was intended to rival Peter Jackson’s Weta Digital in New Zealand (who did the ‘Lord of the Rings’ films) but now the future of the business is extremely uncertain.

Its next project is the long-delayed ‘Fury Road’ starring Tom Hardy - a reboot of Miller’s ‘Mad Max’ franchise, said to be shooting in Namibia after Australia’s rainfall scuppered their plans of creating an arid wasteland there.

IF magazine says that there could be a chance for some staffers to join a new company set up by George Miller and producer Doug Mitchell in the New Year.