Disney Pivots to 'Flywheel' Strategy After Live-Action Moana and Star Wars Underperform
The studio is redefining success by prioritizing ecosystem value and merchandise over raw theatrical ticket sales.
Disney has admitted that its recent high-profile releases, the live-action Moana and Star Wars: The Mandalorian and Grogu, failed to meet the company's theatrical expectations. The admission comes as the studio attempts to redefine success by emphasizing ecosystem value over raw ticket sales.
According to Disney's latest financial results, the live-action Moana earned $263 million at the global box office. With a production budget of $250 million, the film likely failed to turn a profit once marketing and distribution costs were factored in. Similarly, Star Wars: The Mandalorian and Grogu brought in $345 million against a $165 million budget. Despite the higher margin, the film marks a historic low for the franchise, becoming the lowest-grossing live-action Star Wars movie, surpassing the previous low set by Solo.
The Shift to the Flywheel
These results arrive during a period of stark contrast for Disney's cinematic slate. While the company is celebrating massive wins—Toy Story 5 has already surpassed $1 billion at the box office, and The Devil Wears Prada 2 has been cited as a success—the studio is struggling to find a consistent audience for its live-action remakes and Star Wars returns.
To mitigate these losses, Disney is leaning heavily into its "flywheel" strategy. This corporate approach treats theatrical releases not as primary profit centers, but as massive marketing campaigns designed to drive revenue through theme park attractions, streaming subscriptions, and consumer products. In its financial earnings report, Disney stated that these franchise investments "contributed to value creation beyond their theatrical releases," specifically citing the role of merchandise in sustaining the brand's health.
Redefining Success
This pivot highlights a growing disconnect between Disney's high-budget expectations and the actual appetite of audiences for live-action adaptations and the Star Wars cinematic universe. By shifting the narrative toward merchandise and ecosystem value, Disney is attempting to move away from the traditional box-office-centric model that has dominated the industry for the last decade. The goal is to convince shareholders that a film can be a "flop" at the theater while remaining a victory for the broader corporate machine.
What's Next
Industry analysts are now watching to see if this "flywheel" justification can sustain investor confidence as production budgets for franchise films continue to climb. While Disney noted that audience scores for both Moana and The Mandalorian and Grogu remained strong, the gap between critical reception and commercial viability remains a critical hurdle. Whether the company can translate strong audience sentiment into actual ticket sales for future live-action ventures remains unconfirmed.