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Disney Confirms Star Wars Galaxy's Edge Is Suffering

Matt McGloin Posted: 08/06/2019 - 18:11 COMMENT
Disney Confirms Star Wars Galaxy's Edge Is Failing

Disney released its third-quarter earnings report for 2019 today which again sees sales surrounding Star Wars continuing to drop and suffering in the Parks, Experiences and Products division, which includes the Galaxy's Edge park, a downward trend that started with the release of Star Wars: The Last Jedi.

The earnings report confirms the earlier reports that attendance at Disney parks is on the decline, which includes Star Wars Galaxy's Edge land in California, something I also confirmed while at Comic-Con. Here is what the Disney report says (note: bold my own):

The decrease in operating income at our domestic parks and resorts was due to higher costs and lower volume, partially offset by increased average per capita guest spending. Higher costs were driven by labor and other cost inflation and expenses associated with Star Wars: Galaxy’s Edge, which opened at Disneyland Resort on May 31. The decrease in volume was due to lower attendance, partially offset by higher occupied room nights

You will note, that as I mentioned in my Comic-Con exclusive, that a big reason that added to the people staying away from Star Wars Galaxy's Edge is due to Disney jacking the cost of ticket prices prior to the park opening to take advantage of the Star Wars fans, which has backfired completely, similar to Disney's approach to the films. The investor's report confirms the higher average ticket prices (bold my own):

Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending.

We see that the higher ticket prices backfired because as noted above (bold my own): "The decrease in operating income at our domestic parks and resorts was due to higher costs and lower volume."

What Disney expected, is that they could jack ticket prices and that a lot of people would still visit their parks and Star Wars Galaxy's Edge, but that didn't happen.

Star Wars Galaxys edge

Disney's Star Wars Galaxy's Edge and Domestic Parks suffering

What is also particularly worrisome is that Disney notes in their investor's report that their domestic (U.S.) parks are not doing as well and suffer losses, which were offset by increases at their foreign parks (bold my own):

Operating income growth for the quarter was due to increases at our consumer products businesses and Disneyland Paris, partially offset by a decrease at our domestic parks and resorts.

Again, this means people are not going to the U.S. Disney parks, but more went to their foreign parks. 

Star Wars The Last Jedi

Star Wars Merchandise continues to decline 

It should also be noted that Disney previously reported on their Consumer Products Division separately from their Parks Division in their investor's reports from last year, which included Star Wars, Marvel Comics, and Licensing, but following my articles, Disney has since paired Consumer Products with their Parks Division, which makes it appear as if both divisions show an increase in revenue, essentially hiding the losses from Consumer Products. Prior to the pairing, Disney Consumer products suffered revenue losses each quarter since the release of Star Wars: The Last Jedi.

Today's earnings report again confirms Star Wars merchandising sales are on the decline (bold my own):

Growth at merchandise licensing was primarily due to higher revenue from merchandise based on Toy Story, partially offset by a decrease from Star Wars merchandise.

Essentially what is happening, is that growth from different divisions at Disney is offsetting the big losses from Star Wars.

(source: waltdisneycompany.com)

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