While Walt Disney and Comcast's Universal Studios seem like they're doing battle in the movie, television, and theme park spaces, they're actually fighting to establish intellectual property.
When you create hit characters -- anything from Baby Yoda to the Minions to the Fast & Furious Folks and even Stephen A. Smith -- you can build new franchises around those properties.
Walt Disney (DIS) would never launch a theme park ride without tying it to hit IP anymore than Universal Studios' newest rides, shows, attractions, and its entire Epic Universe theme park will be themed to its biggest-name characters. That means that every non-sequel release from Disney or its Comcast-owned (CMCSA) rival isn't just about success at the box office, it's about establishing more IP that can be expanded into theme parks, television, streaming services, and other areas.
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Disney generally dominates when it comes to IP. It owns Marvel, Star Wars, its classic animation characters, and what was until recently an unquestioned hit factory, the Pixar Animation studio. Now, Pixar has shown vulnerability and you can argue that Universal has actually become the top player in animation with its DreamWorks and Illumination brands.
Image source: Walt Disney
Disney Animation Has (Mostly) Struggled
In 2023 Universal has the top animated film of the year, "Super Mario Bros.," which also happens to be the top-grossing film so far this year at nearly $900 million in global box office. Disney has not released an animated film in 2023, but its 2022 offerings were both failures by the studio's normal lofty standards.
"Lightyear," a "Toy Story" prequel came in at #19 globally for the year bringing in $223 million, which means it likely lost a fair amount of money. Pixar's other 2022 release "Strange World" was a legitimate bomb at $73 million, according to data from Box Office Mojo.
That placed Disney's much-heralded release below "Lyle Lyle Crocodile" and something called "Dragon Ball Super: Super Hero."
Universal, on the other hand saw "Minions: Rise of Gru" bring in $940 million and "Puss in Boots: The Last Wish" haul in $439 million globally. In fact, you have to go back to 2021 to find Pixar's last hit, "Encanto," which took in $256 million at the box office.
That's not a hit by traditional Disney standards, but with a smaller-than-usual budget and a short 30-day release, the film has been considered successful. Still, Universal's "Sing 2" nearly doubled its box office total taking in over $400 million.
Universal Had an Animation Plan
Universal Studios' success in animation was not an accident or a trick of the release calendar. The company has been planning for this for a long time, according to Comcast CEO Brian Roberts' comments during the company's first-quarter earnings call.
"Two things amongst many highlights in particular that stand out for me and I'm really proud of, one is the animation business," he said. "By strengthening and combining our capabilities across DreamWorks and Illumination led by Chris Meledandri, we've had tremendous success creating franchises that people know and love all over the world. 'Despicable Me,' 'Shrek,' 'Pets,' 'Minions', and more recently 'Puss in Boots,' and now 'Super Mario Bros.,' which just broke a number of records including the biggest worldwide opening of any animated film of all time.
Universal has been laying the groundwork for this success for years, according to Roberts.
"These are the results of the strategic decision we made years ago to become a leader in animation and the conviction we've had to continue to invest in the business even during the depths of the pandemic, which are now clearly paying off," he added.
That bet will pay off even more when the company opens Epic Universe, its third theme park at Universal Studios Florida. That park will feature Nintendo World, where the Super Mario characters are major players as well as rides based on DreamWorks IP.
