`PRINCE' NO BOX OFFICE KING, OBSERVERS SAY.

Byline: Geraldine Fabrikant The New York Times

It was to be the film in which DreamWorks SKG partner Jeffrey Katzenberg would step out of Michael Eisner's shadow - an animated story with a huge box office, just like ``The Lion King'' and other hand-drawn hits that Katzenberg helped oversee before his bitter split with Eisner and The Walt Disney Co. several years ago.

But this film, ``The Prince of Egypt,'' was also to be something more: a movie with a serious theme that audiences would recognize as raising the art of mass-market animation to a new level.

Yet, while the Christmas weekend ticket sales should please Katzenberg - the animated story of Moses has held up at the box office in the face of intense competition from holiday films - many people in Hollywood say that two weeks after its release, the movie is not showing signs of becoming a megahit.

``It's still early,'' said an executive with a major theater exhibitor, speaking on condition of anonymity. ``But `Prince of Egypt' didn't do the kind of opening that forecasts a $100 million film.''

The $100 million benchmark is significant, because industry estimates place the film's cost between $75 million and $100 million. And DreamWorks is widely thought to have spent as much as $50 million to promote it.

But whether it was a matter of misjudging the public's appetite for a serious animated film during the holiday season or simply running into heavy competition that may be fragmenting the audience, or perhaps even exposing new fault lines in the animation market, Katzenberg and DreamWorks have found that it is not easy to out-Disney Disney.

After opening on Dec. 18 and averaging $4,496 a screen, or $14.5 million in its first weekend, by Sunday afternoon executives of DreamWorks were forecasting $15.3 million for its second weekend, a number that several top-level industry executives at other studios said they found overly optimistic. Using the DreamWorks numbers, that brings the total to $40.2 million since the movie opened.

And an executive close to DreamWorks who requested anonymity said he was convinced the film would gross more than $100 million. Others put the final figure at $80 million to $90 million in the United States.

Although the film is clearly a critical success, the latter figures would not seem to put it on track for the kind of financial success of two lighter-hearted holiday-season animated offerings. Viacom's ``The Rugrats Movie,'' which opened at $10,065 a screen and grossed $76.8 million after four weeks, cost a mere $25 million to make. Meanwhile, Disney's ``A Bug's Life,'' which opened at $12,360 a screen and has taken in nearly $100 million for the same period, is the biggest hit of the group and cost about $40 million.

Though movie studios keep only about half of the box office gross, once a film reaches a critical level, movie company executives can project how much a film will reap from sales in cable, videocassettes and other markets.

Because DreamWorks has kept its costs a well-guarded secret, it is hard to gauge how much money ``Prince of Egypt'' would make if it did $85 million at the U.S. box office.

Katzenberg, the executive producer of ``The Prince of Egypt,'' reached by telephone Sunday in Hawaii, where he was vacationing, declined to comment. The movie is not the first animated film from DreamWorks, a company founded with much fanfare in 1994 as a partnership of Katzenberg, record-industry magnate David Geffen and filmmaker Steven Spielberg. In early October, DreamWorks released ``Antz,'' a computer-animated movie similar in look and theme to ``A Bug's Life,'' but like ``Prince of Egypt'' aimed somewhat above the kiddie crowd.

``Antz,'' which cost an estimated $42 million and at the time of its release had the animation field to itself, opened to a respectable $7,020 a screen. The film has long since broken into the black, grossing $87.9 million as of last weekend, and is likely to turn a good profit.

But for DreamWorks, there is perhaps much more riding on ``Prince of Egypt,'' a film aimed at Disney's forte - hand-drawn animation. The effort devoted to making and marketing the movie indicate that Katzenberg's motivations in building an animation division are based on much more than an ego battle with Eisner.

``Animation is the source of money that will make DreamWorks work,'' an executive at a rival studio said in an interview earlier this year.

That is because the profit margins for animated films are generally much higher than for live-action movies. Not only do animated films often generate sales of related products, but they do not depend on costly stars who take either a big share of the upfront money or a percentage of the box office - or both.