Critical reception to the film was varied; although its script and cast were praised by many reviews, its animation quality was heavily criticized. The film was a commercial success, earning over thirteen times its less-than-$8 million budget. A sequel, Hoodwinked Too! Hood vs. Evil, directed by Mike Disa, and written by the Edwards brothers and Leech, was released in 2011 to negative reviews and financial failure.
Little Red Riding Hood discovers that the Big Bad Wolf has disguised himself as Granny. Red's grandma jumps out of the closet tied up just as the axe-wielding woodsman bursts through the window, startling everyone. The police quickly arrive, and Red, Wolf, Granny, and the Woodsman are questioned by Detective Nicky Flippers about the events leading up to the incident.
Red explains that she was delivering goodies for her grandmother when she discovered a threat from the mysterious Goodie Bandit. Hoping to save her Granny's recipes, she embarked upon a journey to take them to the top of a nearby mountain where her Granny lives. On her way, she encountered the Wolf, who asked her a series of suspicious questions. She managed to escape and eventually reached her Granny's house; however, she found the Wolf already waiting in ambush.
What at first seems to be an open-and-shut case becomes confused though, once it is learned that the Wolf is an investigative reporter. He reveals that he was searching for a lead on the identity of the Goody Bandit and had reason to believe that Red and Granny were the culprits. Locating Red, he questioned her, hoping to get to the bottom of the mystery. When Red escaped, he headed for her Granny's house and arriving first, went undercover, hoping to trick her into giving him the evidence he needed.
When questioned, the Woodsman (whose name is Kirk) reveals that he is in fact an aspiring actor who was only trying out for the part of a woodsman in a commercial. After his schnitzel truck was robbed by the Goody Bandit, he went out into the woods to get in character for his role and spent the rest of the day chopping trees. A large tree rolled after him and pushed him through the window of Granny's home. The investigation then turns to Granny, who reveals that, unbeknownst to her family, she is an extreme sports enthusiast. During a ski race earlier that day, she was attacked by the opposing team, but got away safely after learning that they were hired by the Goody Bandit.
Despondent over her Granny's lack of honesty, Red wanders off alone. Meanwhile, Nicky Flippers realizes that the one commonality between all four stories was a bunny named Boingo and concludes that he is the Goody Bandit. However, Boingo has already sneaked into the home and stolen Granny's recipes. Red sees Boingo and follows him to his hideout at a cable car station, but the police pursue him in the wrong direction. Granny, the Wolf, and Kirk manage to locate Boingo as he is explaining his evil scheme to Red. Boingo plans to add an addictive substance to the stolen recipes and then explode the forest, making way for new real estate for expanding his business.
The Wolf and Kirk go undercover to distract Boingo as Granny sneaks into his lair, but open conflict ensues. Boingo sends a bound and gagged Red down the mountain in a cable car loaded with explosives and Granny goes after her, with Boingo and his henchmen in pursuit. Red manages to free herself, and escapes with Granny, while the police, who have been located by the Wolf's assistant Twitchy, are waiting at the bottom of the mountain to arrest Boingo and his henchmen. Some time later, Kirk finds success as part of a yodeling troupe, and Red, Granny, the Wolf, and Twitchy are enlisted by Nicky Flippers to join a crime solving organization called Happily Ever After Agency.
Hoodwinked! was one of the first independent computer-animated films to be produced without the aid of a distributor. It was produced on a budget of less than $8 million, significantly less than a typical computer-animated film's budget. The costs of computer-animation software had only recently decreased to a price that was accessible to more than just major studios, and according to producer David Lovegren, "Six or seven years ago, the idea of doing Hoodwinked! as an independent [animated] feature would have been impossible."
The filmmakers only made the film independently by necessity, and Cory Edwards has said, "It's not a model to be followed. It was a once-in-a-lifetime, seat-of-your-pants kind of thing that just barely came off." However, he added that the process was worth going through to get the film made, and encouraged aspiring filmmakers to be willing to follow it.
Brothers Cory and Todd Edwards founded Blue Yonder Films after a number of years spent producing commercials and music videos in Tulsa. Joined by their friend Preston Stutzman, who was put in charge of marketing for the company, they released their first feature film, Chillicothe, at the 1999 Sundance Film Festival. The three then moved to Los Angeles in pursuit of new opportunities, but did not find the amount of success that they had expected. Sue Bea Montgomery, who had served as an associate producer on Chillicothe, also tried to interest studios in working with them, but was met with indifference. She determined that they would have to find greater success in independent filmmaking before anyone would take interest in them and introduced the three to Maurice Kanbar, a successful entrepreneur who had made a minor investment in Chillicothe. They pitched a number of live-action ideas to Kanbar and proposed that he invest in a development division of their company, paying them and covering their rent in exchange for a significant portion of the rights to any scripts that they might sell. Kanbar however, was interested in a more direct approach, and preferred to focus on trying to produce a single film. He had always been a great admirer of animation and was impressed after being shown a direct-to-DVD computer-animated short film that Cory had made called Wobots. He suggested the possibility of producing an animated feature with them that would tell a familiar story with a twist, and gave them a month to come up with a story idea. Kanbar had expressed interest in Cinderella or Pinocchio, but the Edwards brothers did not like these ideas as they had already been done by Walt Disney. A few days after the brothers' initial meeting with Kanbar, Todd found inspiration in non-linear crime dramas, such as Rashomon, Pulp Fiction, Run Lola Run, and Memento and came up with the idea of telling the fairy tale Little Red Riding Hood as a police investigation, using multiple points of view. Kanbar was taken with the idea and agreed to fully finance the film before even seeing a finished script, with the initial intent of releasing the film directly to DVD. In 2002, Kanbar and Montgomery founded Kanbar Entertainment and Kanbar Animation for the production of the film.
Cory served as the film's main director, as he had more experience with animation, comedy, and children's entertainment, while Todd served as co-director. Montgomery and Stutzman were joined by Disney animation veteran David Lovegren as producers on the film, and Cory's and Todd's sister Katie Hooten joined as an associate producer. Tony Leech, who had worked with the Edwards brothers on Chillicothe, was initially hired as an editor, but gained story input as well. He eventually proved to be so valuable to the production that he was given a role as co-director.
The filmmakers found independently producing the film to have both benefits and challenges. Although they were given a great amount of creative control by their executive producer Maurice Kanbar, their small budget kept them from making potentially beneficial changes to the story once production was underway. Todd Edwards related that "Money doesn't just buy you more talent and more machinery, it also buys you flexibility on a story level. At Disney, if they don't like the third act, they just throw the whole thing out and re-animate the whole thing, even if it's finished ... We had no such luxury, and so in a way, you're watching our first version of the movie." Knowing ahead of time their inability to alter the film's script once animating had begun, an effort was made by the filmmakers to finalize the script as much as possible before the start of production, which is not a common practice for studio-produced animated films.
Turning away from the well-known archetypes of the Little Red Riding Hood characters, the filmmakers continued to look towards non-linear crime dramas for inspiration instead. Producer Preston Stutzman explained that "The whole film is about surprises and secret lives." Not wanting Red to be "boring" or "too innocent", she was patterned on James Dean and given the desire of leaving home to find her way in the world. Todd Edwards had the idea of basing the Wolf on Chevy Chase's character in Fletch, feeling that it would be fun to apply the character's dry, deadpan style of humor to an animated wolf, while Cory Edwards created the hyperactive character of Twitchy to serve as the Wolf's foil. Going against types, Red's Granny was written as a thrill-seeking action hero, while the strong Woodsman was written as being childishly incompetent.
The police officers were written to come across as everyday guys and Cory Edwards has explained that the decision to make three of them pigs was not politically motivated. Nicky Flippers was not a part of the story as it was initially conceived and prior to his creation, the investigation was going to be led by Chief Grizzly. After producer Sue Bea Montgomery and her husband pointed out similarities between the film and the 1950s television series The Thin Man, the Edwards brothers and Leech decided to introduce the character and his dog into the film as an homage. They considered several different types of animals before settling on making him a frog.
Cory Edwards chose to approach the film predominantly as an action/comedy, instead of as a typical animated film, and wrote the script to appeal to audiences of any age like many of the films produced by Pixar or Disney. Road Runner, Rocky and Bullwinkle, and The Muppets have all been cited as inspirations for the film. An attempt was made to distance the film from Shrek and other similar themed films that had been recently released, by excluding magic, wizards, and fairies from the film. Cory Edwards also strived for a different style of humor than Shrek, choosing to make his film more family friendly and less of a satire.
Working out of Tony Leech's apartment, Cory Edwards sketched the film's storyboards, Todd Edwards wrote the script while simultaneously writing the songs, and Leech edited the story reel on his Mac computer. Producer Sue Bea Montgomery showed test screenings of the story reel to children in her neighborhood, and gained input from their reactions. The filmmakers had been considering removing Japeth, but chose not to when he proved popular at these screenings. The children also particularly liked Twitchy, which led to the expansion of the character's role.
In an effort to save costs, the film's cast was originally going to be composed mostly of friends and family members of the filmmakers. Cory and Todd brought in their cousin Tye Edwards to play Dolph and turned to their friend Joshua J. Greene to play Jimmy Lizard. Japeth was written specifically for Benjy Gaither, the son of gospel music singers Bill and Gloria Gaither. He had been a friend of the Edwards brothers since childhood and Cory's short film Wobots had been produced through his animation studio Live Bait Productions. Cory's wife Vicki was given the role of a skunk reporter, and while some consideration was initially given to having an adult play the child woodpecker Quill, the role was instead given to producer David K. Lovegren's daughter Kathryn. The Edwards brothers, Leech, and producer Preston Stutzman all took on roles as well. Cory took on the role of Twitchy, and Pro Tools was used to speed up the recording of his dialogue by 50 percent. Todd played Sandwich Man, Leech played both Det. Bill Stork and Glen, and Stutzman played Timmy.
As the producers gained greater confidence in the film however, larger name actors were brought in. Patrick Warburton was the first celebrity actor to join the film and did so purely out of a love for the script. Though Cory Edwards had originally envisioned the Wolf as sounding like a mixture between a young Chevy Chase and Bill Murray, he praised Warburton's performance, saying that he "made the Wolf his own character." Andy Dick also joined the cast early on, to voice Boingo. He used improvisation and approached the role differently from how it had been written, interpreting the character as victimized and unstable. The filmmakers were enthusiastic over Dick's angle on the character, and Todd Edwards said, "What we had written was kind of stock, to be honest, but Andy Dick, well, where he was supposed to laugh, he'd be crying. Where he was supposed to yell, he'd be laughing. He just mixed it up!" Prolific voice performers Tara Strong, David Ogden Stiers, and Tom Kenny were cast in multiple roles. Strong was cast as Red and Zorra, Stiers was cast as Kirk, the Woodsman and Nicky Flippers, and Kenny was cast as Tommy and Woolworth the Sheep. Emmy-winning actress Sally Struthers was brought in to play Granny Puckett and Joel McCrary was cast as Chief Grizzly.
The film's animation was created on Maya software, and in an effort to save costs, was produced in Manila, Philippines. Producers Sue Bea Montgomery and David K. Lovegren founded the animation studio Digital Eyecandy for the purpose of the film's production and stationed it in a 5,000-square-foot rented house. Cory Edwards traveled to this studio a total of fifteen times over the course of the film's three-year production and has explained that although the house was located in an expensive part of Manila, the rent was no more than that of his two-bedroom apartment in Los Angeles. When Cory was not able to be on site, Todd took over directing duties. "Along with Tony, we were kind of a 'three headed monster,'" Cory explains. "We all knew what movie we were making, and I trusted those guys to make creative calls when I couldn't be there." Lovegren had attempted to start an independent animation studio in the Philippines before in 2001, but the studio, called ImagineAsia, was closed after it failed to attract business. Digital Eyecandy hired approximately twenty animators that had previously been employed by ImagineAsia and at one point, the studio reached fifty employees.
The film's animators had little experience with computer-animation and feature-length films, and had to be trained by the producers over the course of the film's production. Since none of the animators were specialists, they were not divided into specific teams, but instead each worked on all areas of the animating process. The filmmakers found this to be a poor method though, because it kept the individual skills of the animators from being optimized. Due to their independent backgrounds, the animators were accustomed to working at fast paces, and despite their small numbers, each phase of production was able to be completed within a short period of time. Still, schedule and budget restraints led the filmmakers to enlist Prana Studios in Mumbai, India to perform lighting and compositing.
The filmmakers found that the most difficult aspect of producing the film independently was their inability to fix all of the mistakes made in the film's animation. Todd Edwards explained that "it becomes an equation: 'I have 10 things that I would like to change in this shot. I have the time and the budget to do three. Pick those three and then let's move on.' And that was hard to do."
Knowing that they could not match the quality of other computer-animated films, the film was instead designed to imitate the look of stop motion. Cory Edwards cited Rankin-Bass as an inspiration and explained, "If we approach our look like that – photographed miniatures in stop-motion – and if that nostalgia resonates with our audience as far as that look, then we're not going to shoot ourselves in the foot trying to put every freckle and hair on photoreal creatures." Edwards contrasted the technically innovative, but critically panned 1986 film Howard the Duck with the simple, but beloved puppet character Kermit the Frog to illustrate to his crew the importance of well-written, likeable characters over technical quality.
Distancing the film from what producer Preston Stutzman called the "candy-coated, brightly colored pastel world[s]" of other CG animated films, an attempt was made to bring an organic look to the film, and dirt was rubbed into the colors. The Nightmare Before Christmas was cited as an inspiration for the filmmakers to try to bend the characters' shapes into extremes, and many other choices unconventional to computer-animated films were also made. For example, one of the Woodsman's eyes was made bigger than the other, and Red was given only four fingers, so as to make her look more like a doll. Producer Katie Hooten explained that "CG in the past has been pushing the envelope to make things look more realistic, but Hoodwinked takes things back to where CG looks a lot more like a cartoon."
The film's score was composed by John Mark Painter, who along with his wife Fleming McWilliams, constituted the rock duo Fleming and John in the 1990s. The Edwards brothers were fans of the group and first met Painter while Cory was performing in an animated film on which Painter served as the composer. The score was inspired by music from the 1960s and the soundtracks to Planet of the Apes, Dark Shadows, and The Untouchables have been cited as influences, as well as the works of Henry Mancini. It was recorded in Nashville, Tennessee, where Kristin Wilkinson served as the orchestrator and conductor.
In an effort to appeal to older audience members, Todd Edwards chose to replace parts of Painter's score with original rock music. From this came the song "Little Boat", written and sung by Daniel Rogers, who had composed Edwards' first film Chillicothe. "Runaway" was written by Joshua J. Greene, a friend of the Edwards brothers, who also provided the voice of Jimmy Lizard in the film. "The Real G", sung by Cory Edwards and "Bounce", sung by Todd Collins were both written by Painter and Cory Edwards. "Blow Your House Down" was performed by the Filipino band Pupil and written by their lead singer Ely Buendia.
Todd Edwards wrote nine original songs for the film and sung four of them: "Critters Have Feelings", "Tree Critter", "Eva Deanna", and "Glow". "Eva Deanna" was written about a day that he and his wife spent at the zoo with their niece, the daughter of associate producer Katie Hooten. "Great Big World" was sung by Anne Hathaway and replaced another song called "Woods Go-Round", which Edwards considered too childish and described as being "in the vein of Saturday morning cartoons." This change required the scene to be re-animated and re-cut. "Be Prepared" was sung by Benjy Gaither and developed out of a practicality; the filmmakers wanted to introduce Japeth while the character is rocking back and forth on his horns, as though the horns are a rocking chair. However, they realized that this would make the horns too big to fit in a minecart later on in the film. As a solution, they came up with the gag of having the character switch his horns several times, and this led to the song's concept. McWilliams joined Jim Belushi to sing "The Schnitzel Song" and Painter asked his longtime friend Ben Folds to sing "Red is Blue", a selection strongly advocated for by Edwards. Folds was working on a new album at the time, but a year after the proposal, found the opportunity to record the song and compose a piano arrangement for it as well. "Top of the Woods" was sung by Andy Dick and was originally composed to be slow-paced. The recording of Dick's performance was sped up though at the suggestion of Ralf Palmer, a prolific animator and friend of producer Sue Bea Montgomery.
Hoodwinked! was shown to potential distributors throughout various stages of its production. Though a distribution offer was made by DreamWorks, it was turned down as the filmmakers did not feel that it was a good deal. As the film neared the end of production, it was screened at the Cannes Film Festival. Harvey and Bob Weinstein were also at the festival at the time, screening Robert Rodriguez's film Sin City, which they were distributing through their then newly formed studio, The Weinstein Company. They decided to pick Hoodwinked! up for distribution after it was brought to their attention by Rodriguez's wife, whose attorney also happened to work for Blue Yonder Films. The Weinsteins had recently left the Walt Disney Company and according to Cory Edwards, they "loved the idea of picking up an animated film and giving Disney a run for their money." The involvement of the Weinstein Company encouraged Kanbar enough to enlist Skywalker Sound. The film was nearly complete by the time that the Weinsteins became involved, and Edwards has stated that nothing was done by them to ruin "the original vision of the movie." However, a few edit suggestions were made to quicken the film's pace which Edwards felt were good ideas, as he considered the first twenty minutes to be dragging.
The Weinstein Company also heavily recast the film with bigger-name actors in the hopes of attracting a larger audience. Anne Hathaway replaced Tara Strong in the lead role of Red; Jim Belushi replaced David Ogden Stiers in the role of Kirk, the Woodsman; Anthony Anderson replaced Tony Leech in the role of Det. Bill Stork; Glenn Close replaced Sally Struthers in the role of Granny Puckett; Xzibit replaced Joel McCrary in the role of Chief Grizzly; and Chazz Palminteri replaced Tom Kenny in the role of Woolworth the Sheep. Despite these recastings, Tara Strong retained the much-smaller role of Zorra, David Ogden Stiers retained the role of Nicky Flippers, Tom Kenny retained the role of Tommy, and Tony Leech retained the role of Glen. Many high-profile country singers were considered to replace Benjy Gaither in the role of Japeth, but none of them were available and Gaither retained the role. The Weinsteins also wanted to replace Joshua J. Greene in the role of Jimmy Lizard with a more famous actor such as Albert Brooks, but the role was ultimately not recast. Edwards appreciated the reason for the recastings and attributed a large part of the film's financial success to them. He expressed disappointment about the amount of recasting however, saying, "At a certain point it became Recast-o-Rama, everybody got recast-happy. My feeling is, you get two or three names on that poster, you're fine. Our Hoodwinked poster has like a paragraph of names on it. After a certain point, I don't think you need more than two, three celebrities – give it to the voice actors. It sweetens the pot." Since the film's animation had already been mostly completed by the time the recastings were made, the new actors had to deliver their lines exactly as the old actors had done, giving them no opportunity to improvise. Edwards expressed disappointment with the fact that the original actors would not get any credit for their improvisations in the film, which were copied by the replacement actors.
The soundtrack was released in December 2005. Owing to legal disputes, the CD was pulled off of the market a month after its release and was not available again until November 2009. It was re-released on iTunes in January 2010.
Hoodwinked! received a one-week, limited release in Los Angeles on December 16, 2005 to qualify for Oscar consideration. A nationwide U.S. release was scheduled for Christmas Day, 2005, but it was moved to January 13, 2006 to avoid competition with other films released during the holiday season.
In its opening four-day weekend, Hoodwinked! grossed $16,879,402 in 2,394 theaters in the United States, ranking No. 2 at the box office and averaging $7,050 per venue. It fell $50,000 short of Glory Road, which took the box office's number-one spot that week. The film maintained its number-two spot in the box office for its second weekend, dropping 16.1 percent, and placed in the top ten for a total of five weeks. At the end of its theatrical run it had grossed a total of $110,013,167 worldwide – $51,386,611 in the United States and $58,626,556 in other territories.
Hoodwinked! received mixed reviews from critics. On Rotten Tomatoes, the film has a rating of 47%, based on 123 reviews. The site's consensus reads, "This fractured fairytale doesn't have the wit or animation quality to compete with the likes of the Shrek franchise." On Metacritic, it received a score of 45 out of 100, based on 29 critics, indicating "mixed or average reviews".
James Berardinelli of ReelViews gave the film two and a half stars out of four, and claimed that many of the film's ideas for altering its familiar storyline "sound better on paper than they turn out in execution." Finding it tedious to view the film's story told multiple times, he wrote that the film "slips into boredom." Bruce Westbrook of the Houston Chronicle also gave the film two and a half stars, and although he praised its "snappy dialogue and fresh characterizations", he considered the film's plot underdeveloped and characters lacking in motivation. Peter Rainer writing for The Christian Science Monitor gave the film a C+ and called it "a moderately enjoyable escapade that isn't quite clever enough for adults and not quite imaginative enough for children." He was not overly critical of the film, but felt that it was a disappointment in comparison to the high standards for computer-animated films set by Pixar. Jami Bernard of the New York Daily News suggested that timelessness is a necessary component of an animated classic, and faulted the film for its attempt to be hip and current. While Ty Burr of The Boston Globe praised the film's vocal performances, he wrote, "Hoodwinked never builds to a level of sustained comic mania ... One aches to think what the great Looney Tunes directors could have done with this material."
Several critics however, were more enthusiastic about the film. Owen Gleiberman of Entertainment Weekly gave Hoodwinked! an A- and praised the zaniness of its humor. Calling the filmmakers heroes, he compared them to Quentin Tarantino and Steven Soderbergh due to their potential for bringing independent filmmaking to prominence in animation. Although Nancy Churnin of the Dallas Morning News considered the film inferior to those of Pixar and DreamWorks, she still gave it a B and wrote, "it's got an upstart charm, a clever premise, appealing characters voiced by a terrific cast and a script that should make you laugh out loud more than once." In his review for the Chicago Tribune, Michael Wilmington praised the film's voice cast, music, and script, and wrote, "it packs more verbal wit and surprise than the usual cartoon." Kevin Thomas of the Los Angeles Times gave it three and a half stars out of five calling it "high-energy, imaginative entertainment".
Japeth was praised amongst both positive and negative reviews. Gleiberman and Churnin both felt that the character was one of the best parts of the film, and Westbrook and Wilmington both described him as "a hoot". In a mostly positive review for the Orlando Sentinel, Roger Moore called the character hilarious, while in a mostly negative review for Variety, Justin Chang wrote that the character "steals the show every minute he's onscreen."
One of the main criticisms of the film was the poor quality of its animation. Berardinelli called it some of the worst CGI animation in memory. He felt that the characters looked plastic, considered the backgrounds dull, and wrote, "On more than one occasion, I thought I was watching something made for TV. When compared to today's visual standards for animated films, Hoodwinked is far below the curve." Burr considered the film's surfaces poorly rendered and compared them to "Teletubbieland reupholstered with Naugahyde." Westbrook felt that the animation worked well for the animal characters, but wrote, "the humans have a glassy sheen and brittle hardness, much like work done in the early days of CG ... That art has come too far to embrace a throwback like Hoodwinked as lovably quaint. It's simply dated." Stephen Hunter of The Washington Post compared the characters to rubber toys, and wrote, "their faces are without nuance or vividness ... In movement, especially, do they lack grace and conviction. It seems like the recent breakthroughs in computerized magic have bypassed the poor Edwards fellows, as it looks stuck somewhere in the 1970s, or maybe even earlier."
Many reviews negatively compared the film to the Shrek series. Liam Lacey of The Globe and Mail considered the film to be "a sort of discount Shrek", while Burr called it "Shrek with added drek." Westbrook wrote that "Echoing such a popular predecessor as Shrek is not a good thing – especially when the echo is so faint." Berardinelli felt that the fairy tale references were not as smartly done as in the first Shrek film, while Bernard felt that Hoodwinked! took fairy tale revisionism too far. He felt that the humor in Shrek worked due to the fairy tale characters remaining in character throughout the film, and wrote, "It's pointless to scold them for behaving the way fairy tales intended, and that's far funnier than turning them into breakdancing anachronisms." Bill Muller of The Arizona Republic, considered Red's kung fu abilities to be overly similar to Princess Fiona's "Matrix agility." Gleiberman also noted the similarities between the film and Shrek, but he was positive in the comparison, feeling that its independent production gave the filmmakers "the freedom to follow their flakiest corkscrew whims." While Wilmington did not find Hoodwinked! as impressive or beguiling as Shrek, he wrote that "when it's cooking, it does make you laugh."
Retrospectively, several critics noted that the film was considerably better than the 2007 computer-animated fairy tale parody film Happily N'Ever After. Although Burr had given Hoodwinked! a negative review, he likened the film to Citizen Kane in comparison to Happily N'Ever After. Wilmington also considered Hoodwinked! the superior of the two films, and Lou Lumenick of the New York Post felt that the film was far wittier than Happily N'Ever After. While Christy Lemire of Associated Press likened Hoodwinked! to a poor man's Shrek, she went on to call Happily N'Ever After a poor man's Hoodwinked!
Hoodwinked! received a Saturn Award nomination for Best Animated Film at the Academy of Science Fiction, Fantasy & Horror Films, but lost to Corpse Bride. Entertainment Weekly ranked the film as number ten on "The Must List" for its January 27, 2006 issue, calling it a "genre-busting indie animated gem."
Hoodwinked! was released on DVD on May 2, 2006 and on Blu-ray and DVD on February 15, 2011. The film was the best-selling DVD in its initial week of release, selling over 700,000 copies and making over $13.5 million. A twenty-two-minute behind the scenes video podcast is available for free on iTunes.
In February 2006, author Timothy Sexton wrote an article titled "Hoodwinked: A Postmodern Examination of the Dangers of Runaway Capitalism" for Associated Content, in which he posited that Hoodwinked! was one of the first postmodern animated films and also carried political undertones. He argued that the relative nature of truth was shown by revealing deviations from the original fairy tale as the film explored the story from each of the central characters' points of view. Calling Hoodwinked! "the most subversive movie released nationwide since Fahrenheit 9/11", Sexton went on to interpret the film as a critique on the free enterprise system. He drew comparisons between the film's villain and the typical American business owner, going so far as to say that the character was "clearly based on people like Bill Gates and Sam Walton". In Sexton's view, the film exposed the flaws of capitalism, showing that if left unregulated, business owners will establish monopolies and eliminate competition.
The film's director and co-writer Cory Edwards was surprised by Sexton's interpretation and denied that the film intentionally carried any political messages. He explained that he and the other filmmakers were simply drawing from the evil schemes common of James Bond films, Bugs Bunny cartoons, and The A-Team, and wrote "If Mr. Sexton sees my movie as a sermon against mega-corporations monopolizing America, that's fine. But our villain is just as easily the face of every dictator in history, or every schoolyard bully who is compensating for low self-esteem, or any Mafia boss who dominates by either absorbing or wiping out his competition. Hey, if you look at an abstract painting and see the devil in a red splotch, that's your prerogative ... I guess a movie's message is only partially supplied by the filmmaker."
In May 2007 Time magazine ran an article by James Poniewozik titled "Is Shrek Bad for Kids?" which considered the negative effects on children of being raised with fairy tale satires, instead of the original stories. Poniewozik mentioned Hoodwinked! writing, "I thought Hoodwinked! and most of the Shrek series were hilarious ... But even if you ultimately reject their messages, old-school fairy tales are part of our cultural vocabulary. There's something a little sad about kids growing up in a culture where their fairy tales come pre-satirized, the skepticism, critique and revision having been done for them by the mama birds of Hollywood." Cory Edwards wrote into the magazine, expressing his similar sentiments and writing, "As the writer-director of Hoodwinked, it may surprise you that I couldn't agree more with James Poniewozik's article. Even as I was making the film, I asked myself the same question: Are we parodying something that kids should have the chance to experience first, 'un-parodied?' We went to great lengths to distance our film from Shrek's humor (and no, I don't think Shrek considers kids). I would hope that Hoodwinked and its sequels will be seen as trying to do something genuine with its characters, rather than look for the next joke at the expense of innocence. We ALL need the real folklore of fairytales, whether we admit it or not."
A sequel, Hoodwinked Too! Hood vs. Evil, was released on April 29, 2011. It was first announced in January 2006 and in February, Cory Edwards, Todd Edwards, and Tony Leech explained that although they would be writing the screenplay, they would not return to direct. Cory Edwards later elaborated on this decision, explaining that he had a negative experience working with some of the first film's "key players" and felt that he had been poorly treated by them. He also cited concerns over being confined to animation, and stated that he felt it would be a lateral move to direct a sequel to his first film as his second film. In March 2007, Edwards announced that Mike Disa had been hired to direct the sequel and expressed enthusiasm over his involvement, saying that he "has a real passion for the film and a devotion to maintaining the Hoodwinked world. He wants to do the sequel justice and he really gets what we're trying to do." Although much of the first film's cast returned for the sequel, Anne Hathaway was replaced by Hayden Panettiere in the role of Red and Jim Belushi was replaced by Martin Short in the role of Kirk, the Woodsman.
Kanbar Entertainment initially intended to finance production of the sequel independently as it had done with the first film, but entered into a co-financing agreement proposed by The Weinstein Company. The film was initially scheduled to be released on January 15, 2010, but in December 2009, The Weinstein Company postponed the film's release date indefinitely. In April 2010, Kanbar Entertainment brought a lawsuit against The Weinstein Company. In addition to claiming that the postponement of the film's release date breached an agreement between the two companies, the lawsuit accused the Weinstein Company of not contributing to monthly production accounts after February, 2009, neglecting to consult Kanbar Entertainment of a release strategy, and not responding to proposed changes to the film, even though Kanbar Entertainment held "final authority on production decisions".
The film was a financial failure, earning $16.9 million worldwide; only about half of its budget. Critical reception to the film was almost universally negative, with a Rotten score of 11% across 61 reviews on Rotten Tomatoes and a score of 20/100 on Metacritic. Cory Edwards expressed disappointment with the finished film, indicating that it was heavily altered from the original script and saying that it was "deflating to give this thing away and watch others run with it in ways I would not."