Disney CEO Josh D'Amaro recently confirmed that the Star Wars feature The Mandalorian and Grogu failed to reach its projected box office targets. While the film's theatrical run was underwhelming, the studio is looking to theme parks and retail to maintain the franchise's momentum.
The $100 million Moana deficit and Star Wars' theatrical slump
Disney's recent third-quarter fiscal earnings call highlighted a period of significant theatrical underperformance for the studio's major tentpole projects. As reported by the source, the live-action adaptation of Moana, featuring Dwayne Johnson, is facing a potential loss of over $100 million at the box office. This financial setback coincides with the disappointing performance of The Mandalorian and Grogu, a film directed by Jon Favreau that was intended to be a cornerstone of the Star Wars cinematic slate.
The film, which premiered on May 20, 2026, struggled to replicate the massive commercial success of its predecessors. Despite a high-profile cast including Pedro Pascal, Jeremy Allen White, and Sigourney Weaver, the 132-minute, PG-rated epic received mixed reviews from critics. The story, which follows Din Djarin and Grogu as they attempt to rescue Rotta the Hutt to assist the New Republic, failed to ignite the same level of box office fervor that the television series had previously cultivated.
Millennium Falcon crowds and Star Wars retail growth
Disney is attempting to redefine success by looking beyond traditional box office metrics. CEO Josh D'Amaro pointed to healthy growth in Star Wars merchandise retail sales as a primary indicator of the brand's continued strength. The studio is leveraging its intellectual property to ensure that even when a film underperforms in theaters, the brand remains profitable through other channels.
Theme park engagement remains a vital component of this multi-platform strategy . Disney reported increased visitor numbers at the updated Millennium Falcon attractions located at both Disneyland and Walt Disney World. This surge in park attendance , combined with significant engagement in Star Wars gaming, suggests that the franchise's value is being successfully distributed across Disney's wider ecosystem. The studio's strategy relies on these ancillary streams to create a self-sustaining loop of consumer interest.
Can ancillary revenue offset the May 2026 film's mixed reception?
The reliance on theme parks and streaming to mitigate theatrical losses raises critical questions about the future of the Hollywood blockbuster model. While Disney's ability to monetize its IP through Disney+ and retail is evident, it is unclear if this strategy can withstand a trend of declining theatrical interest.. One specific question remains: will the mixed critical reception of The Mandalorian and Grogu eventually lead to a decline in the very theme park and retail engagement that Disney is currently relying on?
Furthermore, the studio has not addresed how the potential $100 million loss from the live-action Moana will influence its future investment in live-action remakes. There is also the question of whether the "ancillary-first" approach might inadvertently devalue the theatrical experience, making it harder to attract audiences to cinemas in the future. Finally, it remains to be seen if the New Republic storyline can successfully bridge the gap between television fans and general moviegoers.
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