Disney has finally said it out loud: The Mandalorian and Grogu flopped at the box office.
Speaking on Wednesday’s quarterly earnings call, Disney CEO Josh D’Amaro admitted the first live-action Star Wars movie in seven years underperformed the studio’s box office expectations, a point the company repeated in its letter to shareholders.
Of course, the admission came wrapped in spin, as D’Amaro argued the movie still paid off by selling toys, driving guests to theme park rides, and boosting engagement in gaming, via The Hollywood Reporter.
Disney Admits The Mandalorian and Grogu Missed Expectations
“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 told investors.
“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,” he added.
Disney’s shareholder letter doubled down: “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.”
CFO Hugh Johnston went a step further, telling investors the film industry “is more of a portfolio game” and that Disney’s “diversified business helps us basically cover the volatility that comes out of the film business.”
The letter even pointed to Toy Story and its more than $16 billion in franchise value as proof the strategy works. The difference is Toy Story 5 crossed a billion dollars at the box office. Grogu didn’t come close.
The Lowest-Grossing Live-Action Star Wars Movie Ever
The numbers tell the story the earnings call tried to soften.
The Mandalorian and Grogu closed out its theatrical run with $177.7 million domestic and $167.4 million internationally for a worldwide total of $345.2 million, per Box Office Mojo.
That makes the Jon Favreau-directed film the lowest-grossing live-action Star Wars movie ever released, landing well under the previous franchise low set by 2018’s Solo: A Star Wars Story at $392 million.
The collapse played out just as the $81.67 million domestic opening telegraphed, which is when I argued Disney needs to stop avoiding Luke Skywalker.
The film carried a reported $165 million production budget, with marketing pushing the total spend toward a reported $300 million, before Disney raced it to digital in just 60 days.
Even THR notes the theatrical run likely left a substantial shortfall for the studio, and that it’s unclear whether the toy sales and theme park traffic D’Amaro touted were enough to cover it.
The Portfolio Excuse
Think about what Disney is really saying here. A Star Wars movie can no longer be judged on ticket sales, so the goalposts moved to merchandise, a refurbished Millennium Falcon ride, and gaming engagement.
That is exactly the trajectory covered here all year: the box office floor is gone for Marvel, DC, and Star Wars, and the bill for Hollywood’s Guardians formula has come due.
It also explains the argument that Marvel and Star Wars would be worth more outside Disney+, where the brands have been strip-mined for streaming content while the theatrical side collapsed.
Disney had streaming wins to point to instead, as The Devil Wears Prada 2 just set a Disney+ record, and D’Amaro promised the underperforming live-action Moana will follow as “a strong title on Disney+.”
Notice the pattern: when the box office disappoints, Disney+ becomes the finish line, and worth pointing out is which demographic that hits. Answer: Not the one intended for Star Wars.
What Comes Next For Star Wars
The admission lands as the fallout keeps spreading at Lucasfilm.
As previously covered, Kathleen Kennedy has been blamed for the Mandalorian and Grogu flop, and the bigger picture shows Star Wars has lost 85 percent of its audience.
Insider info has also said a Star Wars reboot is incoming as part of a larger reset that includes Marvel.
All eyes now turn to Star Wars: Starfighter, starring Ryan Gosling and directed by Shawn Levy, which opens May 28, 2027.
As recently covered while at Comic-Con, Gosling is said to be heavily involved in the production, and Lucasfilm is going big for the Star Wars 50th anniversary that same month.
Update, August 21: The portfolio argument now has a data point attached. Luminate’s mid-year figures show The Mandalorian was the most-streamed Star Wars series on Disney+ in the first half of 2026 with zero new episodes, 2.4 billion minutes of rewatching that did not convert into ticket sales.
Disney can call The Mandalorian and Grogu a portfolio win all it wants. The box office already delivered its verdict, and now Starfighter has to answer for it.
