Q: What’s just happened?

Disney’s Inside Out 2 has seen an impressive opening weekend at the box office, with domestic revenues of $155m, and International takings of $140m in this same period, per data from Box Office Mojo. This has made it the first theatrical movie since global phenomenon Barbie in 2023 to exceed a $100m domestic opening, placing it among the highest opening weekends of all time. Inside Out 2’s success is also seen as a positive sign for the health of the global theatrical sector after a recent spell of lacklustre performances has led to industry anxiety around the blockbuster summer season, and industry revenues as a whole.

Q: Why has Inside Out 2 done so well, and what takeaways can we draw from this?

Among a number of factors driving the current success of Inside Out 2, one is that the film appeals to a broad audience demographic. Initially, as a more kids-focused title, Inside Out 2 taps into the lucrative (and still comparatively underserved) family audience, who typically attend cinemas as a larger group and therefore contribute to higher individual ticket sales. This has been seen elsewhere in 2024 with family-focused titles such as Kung Fu Panda 4 and Garfield among the highest grossing films of the first half of 2024, with other titles such as Despicable Me 4 also expected to perform well later in the year.   

Another strength of Inside Out 2 is that it deploys an established but less aggressively utilised IP, helping Disney to engage audiences nostalgic for the previous instalment without the baggage of a longer-running and complex cinematic universe. Other studios will hope to replicate this success in their own upcoming sequel instalments, whether for young-skewing franchises such as Paddington in Peru and Sonic the Hedgehog 3 or returns to classic IP such as Gladiator 2 and Beetlejuice Beetlejuice.

Q: How does this fit into Disney’s overall film strategy?

With the ongoing cost-of-living crisis still limiting consumer spend at the box office, but with theatrical revenues still key to the overall return on a title, Disney is taking steps to help support its theatrical revenues in the near term. Initially, Disney is looking to keep Inside Out 2 in cinemas for around 100 days, looking to capitalise on a longer than average theatrical window, a tactic which has previously helped animated films such as Elemental (Disney-owned Pixar’s last theatrical release and the 10^th highest grossing film of 2023) generate high revenues at the box office. 

Animated films in general will continue to be an important component of Disney’s theatrical plans for the remainder of 2024 and beyond. A sequel to 2016’s Moana (which since release has gained a devoted following with over 1bn hours streamed on Disney+) will be released in Q4 of this year, while further instalments in the Zootopia, Frozen and Toy Story franchises are to be released over 2025 and 2026, as the studio looks to return Disney and Pixar animation to a more dominant position in cinemas. 

This marks something of a shift for Disney, which in recent years has prioritised streaming releases on Disney+ for the bulk of its major animated films. This pivot back to theatrical highlights the studio’s plans to capitalise further on family and more general audiences, hoping to entice them back into cinemas through family-friendly, lighter entertainment.

More generally, Disney has announced plans to cut back on its production slate to focus on a smaller volume of high quality movies, as production budgets continue to rise and in the wake of weaker box office revenues for some recent tentpoles. This will be seen most keenly for Marvel, with CEO Bob Iger announcing in May the studio’s intentions to cut back from around four films a year to “two or at the maximum three”, with Disney+ exclusive tie-in shows also cut back from four to around two per year going forwards. 

This significant cutback can already be seen in practice, as 2024 will see only one MCU film (Deadpool and Wolverine) released, compared to three in 2023. Such a decrease in high-budget Sci-fi and Fantasy content will allow the studio to reallocate spend to other genres, including more family-friendly fare, while also allowing Disney to be more selective in its output of major franchise titles, making its releases more of an ‘event’, and helping to build further excitement among fans.