RESOLVING THE LEDGER
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Logo text Disney acknowledged Wednesday that its recent Star Wars movie did not meet expectations at the box office.
The company's CEO Josh D'Amaro told investors on an earnings call that Star Wars: The Mandalorian and Grogu underperformed, but added the Disney+ TV series' big-screen debut drove revenue to other parts of the company — such as toy sales and attendance to Star Wars rides at Disney theme parks.
"Even when our franchise films don't meet our box office expectations, as with The Mandalorian and Grogu and the live-action Moana , our investments in these core properties fuel other parts of our company," D'Amaro said. " The Mandalorian and Grogu drove healthy growth in retail sales for the Star Wars franchise and drew guests to the updated Millennium Falcon attraction at Disneyland and Walt Disney World, and led to significant engagement in gaming as well. And the live-action Moana is expected to be a strong title on Disney+, building on the success of the original film, which is one of the most-streamed movies of all time."
The company's shareholder letter added, "While audience scores for both Star Wars: The Mandalorian and Grogu and fiscal Q4's live action Moana have been strong, both films underperformed our box office expectations. Even so, these franchise investments contributed to value creation beyond their theatrical releases." As an example, Disney cited Toy Story , which has generated more than $16 billion as a franchise, though, unlike Grogu , Toy Story 5 is a billion-dollar grosser.
Disney CFO Hugh Johnston noted: "Look, theatrical performance is important to us, of course, and we certainly aspire to deliver consistent financial results for our films, but the nature of the film industry is such that it is more of a portfolio game. The good news for us is our diversified business helps us basically cover the volatility that comes out of the film business."
The admission follows plenty of debate online and in the press over The Mandalorian and Grogu 's box office performance.
While the film was inexpensive for a Star Wars movie — estimated at $165 million plus marketing — the title grossed $345 million globally. This likely resulted in a substantial shortfall for the studio when looking at things strictly from the perspective of cost vs. the studio's share of ticket sales. It's unclear if the other revenue drivers D'Amaro mentioned were enough to cover that shortfall.
Moreover, having a Star Wars film that's seen as disappointing might hurt the franchise overall, especially coming off some uneven Star Wars titles on Disney+ and the previous live-action Star Wars film, The Rise of Skywalker , being considered lackluster. The prior low for a live-action feature in the franchise was 2018's origin story Solo , which grossed $392 million.
Still, hopes are high for Disney's next Star Wars effort — Star Wars: Starfighter — which stars Ryan Gosling, is directed by Shawn Levy and is scheduled for release May 28, 2027.
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