NEW YORK, Jan. 3 (Reuters Breakingviews) – Mickey Mouse will grow to triple digits by 2023. Walt Disney (DIS.N) celebrates his 100th anniversary in October. For the past 100 years, Magic Kingdom theme parks have been influenced by technological prowess. It’s not hard to see the real Disneyland as the metaverse blueprint that ties its brand and streaming ambitions together.
Disneyland, a theme park business that opened 32 years after the company began, was based on the vision of founder Walt Disney, who oversaw its completion in Orange Grove, Anaheim, California. Theme parks were revolutionary at the time because Disney wanted destinations that would appeal to both children and adults. Rides and experiences extracted from the park formed the basis of the playbook. .
Theme parks and related consumer goods are an increasingly important part of the company. In the year ended September 2018, the segment had a strong operating margin of 25% and accounted for nearly 40% of Disney’s total operating income of $16 billion. The company’s TV and cable assets, including ESPN, are declining. As such, Disney will rely more than ever on its theme parks to boost profits and offset losses from the company’s streaming video division. Margins for parks, experiences and consumer goods are expected to increase to 30%, while accounting for two-thirds.
Thus, Disney has blocks of the metaverse. Take the Star Wars franchise for example. It has spawned more than 10 movies, several TV series for major streaming service Disney+, and serves as the Disney World backdrop for Star Wars: Galactic Starcruiser, his two-night immersive experience that mimics life in a distant galaxy. It’s working. Creating an augmented reality-based world next isn’t that far-fetched.
But to do so, it will have to beat companies like Meta Platforms (META.O), which have already invested in their own version of the Metaverse. Disney CEO Bob Iger is serving a second term in office, but must hand the reins to someone who can oversee the transition. Way ahead of the curve Tim Sweeney, or former Meta exec Carolyn Everson, who sits on Disney’s board of directors, could lead the way. For the Magic Kingdom, the next century rests on virtual worlds.
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(This is Breakingviews’ forecast for 2023. Click here to see the details of the forecast.)
contextual news
Walt Disney will celebrate its 100th anniversary on October 16, 2023. The company kicks off his celebration on January 27th at the Disneyland Resort.
Edited by Lauren Silva Laughlin and Sharon Lam
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