Disney is seemingly finding itself in the midst of a perfect storm.

On the one hand, they have the fallout of their public foray into politics and the Reedy Creek situation. On the other hand, they have the backlash from price increases.

Mickey’s right foot is trying to find a way to remain competitive with Universal coming for them. The left foot is trying to juggle streaming and Hulu. All of this is the result of past choices and future competition. Of course, this is my opinion, but I will explain why I am saying this.

Just a few years ago, Disney’s stock was riding high. Dividends were flowing, and then CEO, and now returning CEO, Bob Iger thought it time to make guest pay for Walt Disney World resort hotel parking. Ticket and Annual Pass prices skyrocketed. It seemed that every other week saw another food or merchandise price hike as well. Mickey was king, and Bob Iger was his queen.

Then it unraveled when the pandemic hit. While Disney+ was a saving grace, the lack of theatrical releases, and people realizing they might not need Disney as much as they thought, have helped to fuel a decline in Disney demand.

Marvel and Star Wars are not driving the colossal box office numbers they once did, and Star Wars is relying on TV shows now. Disney animation and Pixar animation films are also dropping at the box office. Besides Avatar: The Way of Water, Disney isn’t seeing the huge box office numbers that drove up their stock and bottom line.

People have been complaining about the price hikes on the theme park side, but they have been coming back. This caused crowded parks that cost more, but you can see and do less.

Now after Disney’s coveted ‘pent-up demand’ has started to subside, people aren’t as willing to spend the money. Especially not for a 44-hour Star Wars Galactic Starcruiser experience that costs $4,800-$6,000 base, or for Bob Iger’s FastPast+ pay-to-ride replacements Genie+ and Lightning Lane.

The real battle Disney faces comes from the damage to the Disney brand caused by these terrible choices, but also from Universal, who is coming for Disneyland and Walt Disney World. Orlando will become the most significant battleground with an entirely new Epic Universe theme park coming to Universal Orlando. Disney is worried, and they should be.

How do I know that Disney is worried?

Josh D’Amaro, Chairman of Disney Parks, Experiences and Products, has been out in the media talking about how the new Tron: Lightcycle Run coaster at Walt Disney World is “the tip of the iceberg” for new things coming to Disney parks. But other than the new Moana Journey of Water walkthrough attraction, the retheming of Splash Mountain to Princess and the Frog, and an “amazing” Avatar attraction coming to Disneyland. Not much else has been confirmed.

D’Amaro got on stage at D23 in 2022 and talked about how Disney maybe, possibly, might bring Moana and Zootopia to Disney’s Animal Kingdom. They might, possibly, bring Encanto and Coco to the Magic Kingdom. Nothing was confirmed, just put out there to get people excited. The issue is Disney needs to confirm some projects. They need to spend money to compete with Epic Universe and Super Nintendo World. Not to mention that ‘The Wizarding World’ got a massive boost from the Hogwarts Legacy video game.

Universal has been taking over animation with Minions and Shrek films. Disney’s offerings have been in a box office decline. Now Universal has access to Mario, a character with as much or possibly more recognition as Mickey Mouse. Now they are bringing a new theme park and have added the Super Nintendo World to two other theme parks. Universal Japan just got to use Pokémon in their No Limits parade too. If they can bring Pokémon over here, Disney would be right to worry.

In recent years Universal theme parks have been viewed by many as a better value or experience. The Disney brand is seen by a lot of people as less for more money. Even Disney’s Annual Passholders (and now Magic Key Holders in CA) have been the target of cuts and have been referred to as part of an “unfavorable mix.” But when the parks were down, the passholders were some of the first to return when other travelers were afraid to.

Recently, Bob Iger has been trying to do damage control and has tried to walk back some pricing in Disneyland at Galaxy’s Edge (that has yet to be walked back in Walt Disney World.) He’s offered almost twice as many $104/ day tickets in Disneyland. Iger even reversed his Walt Disney World resort hotel parking fees. During a Morgan Stanley media event last week, Iger said that Disney was too aggressive in pricing and limiting accessibility.

“I always believed that Disney was a brand that needs to be accessible. And I think that in our zeal to grow profits, we may have been a little bit too aggressive about some of our pricing. And I think there is a way to continue to grow our business but be smarter about how we price so that we maintain that brand value of accessibility.”

It’s almost as if making parks unaffordable for your target demographic wasn’t a good idea. However, Disney won’t set itself up for losses. If they start limiting capacity and keep ticket costs “low,” I expect Genie+ and Lightning Lane costs to stay high or go higher. Other cost increases for things like food and merchandise will also likely be snuck in.

On busy days, when it will be closer to capacity, Disney has been charging up to $29 per person for a Genie+ pass. If the capacity is lowered, so it gets “busy” more often, they could charge that or more using the “capacity limits” as justification.

I could even see the after-hours events like Mickey’s Not So Scary Halloween Party costing charging more or offering less. They have to offset their ticket losses somehow.

Disney is at the point where it needs to compete with Universal for both value and newness. Frankly, I don’t know if Disney has the money to invest in the parks, at least not to the level needed to stay competitive against a whole new theme park. Now Iger is saying that he might want to sell off Hulu. Currently, they have a deal in place to buy out Comcast’s 33% share (likely around $9 billion) by next year. However, Bob Iger is making it clear that Disney may not want to do that.

If Comcast wants to buy out the remaining $18 billion o,r so they likely could do that, but if not, Disney will need to find someone to sell their shares to. With streamers facing declining numbers in this market, that might not be easy. If Disney divests the large streaming service to a competitor, it could make their Disney+ competition stronger.

Disney has painted itself into a corner. Some of the reasons were beyond their control, and some reasons were their own fault. How they will get out of this and back on top is yet to be seen, but I hope they can return to what they once were. Back when the “Disney Difference” meant something significant.

Again, this is all only my opinion.

What do you think? Comment and let us know!