Inside Out 2 Isn’t Enough To Save The Walt Disney Company From The Hole It’s In

Disney has not been having a great year. Frankly, it hasn’t had a good year in a couple of years. Their stock is in decline and is well under $100 a share again. “Inside Out 2” did great at the box office and is Pixar’s top-performing film, but just one hit isn’t enough to pull Disney out of its plunge of a lifetime.

But why is Disney in decline?

There are a few reasons that the Walt Disney Company is in a “hole” and some of it was dug by themselves.

1. The box office

While we have some good news with the fantastic performance of “Inside Out 2” in 2023 the company lost quite a bit of money at the box office. Five of their eight releases lost money and one, “The Little Mermaid,” barely broke even.

Estimates put the losses at over $850 million for the company.

“Antman and the Wasp Quantumania” estimated losses at $125 million
“Indiana Jones and The Dial of Destiny” estimated losses at $143 million
“Haunted Mansion” estimated losses at $117 million
“The Marvels” estimated losses at $237 million
“Wish” estimated losses at $131 million

Upcoming films like “Deadpool & Wolverine,” “Alien Romulus,” and “Moana 2” could also perform to profit; other films releasing in 2025 might be more of a challenge. Especially “Captain America New World Order” and “The Thunderbolts*.”

Disney still has a long way to go to make up for all its losses before it can claim a rebound from one film.

2. The Parks

Disney is facing many issues with its theme parks, including cost, lower attendance, and public relations for changes to the Disability Access Service (DAS Pass).

Recently, Disney has also been bested by both Dollywood and Universal in fan polls.

Park attendance

There has seemingly been a decline in attendance at Walt Disney World, with many reporting far lower crowds than average. The reasoning has been attributed to the super high summer temperatures and the cost of visiting the parks. Many families have reported tighter financial situations due to inflation.

One person even showed how his grocery order from Walmart costs more than three times as much as it did two years ago.

Walt Disney’s food costs have increased by up to 61% in ten years. If we are paying more, so are they, and that is passed on to the consumer.

Disney indicates that even if attendance is down, spending per guest is up, but of course, it is. Disney keeps raising prices and fleecing park customers.

People do not have disposable income like they did before. Disney costs keep increasing, and now guests need to pay expensive upcharges like Lightning Lane (Genie+) to get through the lines. Overall, it is getting too expensive for many families.

More affordable and local competition is winning with families staying closer to home. Plus, it’s likely easier to plan your day than the overly complicated Disney theme park planning.

Disney “upgrades” are not always worth the cost.

Another issue facing the parks is Disney’s “new” attractions. While Tron Lightcycle Run, Guardians of the Galaxy: Cosmic Rewind, and Remy’s Ratatouille Adventure are great other “offerings” like Smellephants on Parade, CommuniCore Hall, Forces of Nature, World Celebration Gardens, Journey of Water, and even Tiana’s Bayou Adventure overlay have not been going over well. Tiana’s Bayou Adventure does better with audiences when it works.

Universal Orlando is bringing Epic Universe to the area next year. Disney is just starting on the Tropical Americas section in Disney’s Animal Kingdom and the area beyond Big Thunder Mountain. There could be a fifth gate announcement at D23, but these expansions are years away. People will wait to visit until they can make one big trip to see the new offerings, especially if the cost of basic living continues to rise like it has.

DAS backlash

Another issue facing the Walt Disney Company has been the public backlash to the changes with the DAS pass. Under new guidelines, many individuals who used to receive return-time accommodations no longer qualify. Some of these disabled individuals seemingly should qualify. It’s coming across as people like Disney trying to cash in by squeezing disabled guests by using Lightning Lane upcharges to offer “accommodations.”

Now the media is reporting on it, too, and it’s leaving Disney with a bit of a PR black eye.

3. Disney+

The streaming wars are raging, and now big players are choosing to merge or form alliances to stay profitable. Disney is no exception. They are joining forces with Max to offer competitive packages combining Disney+, Hulu, and Max. Other competitors are doing the same.

These services are banking on advertising, but advertising dollars aren’t as easy to come by as they once were. It’s yet to be seen how that will play out long term.

Disney is no longer saying that Disney+ will be profitable by the end of the 2023-2024 fiscal year. Instead, they say that their streaming services (including Hulu and ESPN+) will be profitable. They have to combine all of them to reach profitability.

IP is also an issue with Disney+ shows and theatrical releases, as the Marvel and Star Wars audience seems to decline. With each new show or film, the audience appears to get smaller. Calling those who don’t like changes to the franchises “bigots” by the people managing the franchises likely doesn’t help create demand either.

Disney has a long way to go to get out of the hole. One hit movie at the box office isn’t going to right the ship. Investors know that, which is likely the reason for the continued stock drop.

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