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The idea of the story within a story is one of the nice touches in The NeverEnding Story. Another one is the idea of a child's faith being able to change the course of fate. Maybe not since the kids in the audience were asked to save Tinker Bell in Peter Pan has the outcome of a story been left so clearly up to a child's willingness to believe.
Despite the sophistication of the source material, this 1984 film isn't particularly successful: Petersen insists on forcing the superficial moral lessons, and the half hour removed from the film by its American distributors leaves it with a harsh, choppy rhythm.