By Jennifer Saba
NEW YORK – Mickey Mouse is turning triple digits in 2023. Walt Disney in October will celebrate its 100th anniversary. In the past century, the Magic Kingdom’s theme parks have survived technological forces. Taking the real Disneyland as a blueprint for the metaverse that marries its brand and streaming ambitions is not hard to fathom.
Disneyland, the 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 an orange grove in Anaheim, California. The theme park was revolutionary at the time, because Disney wanted a destination attractive to both kids and adults. Rides and experiences extracted from Disney’s hefty trove of animated characters and movies such as Sleeping Beauty’s Castle and the Mad Tea Party formed the basis for the playbook. The idea expanded and now the company operates parks in Paris, Hong Kong, Shanghai, not to mention the Walt Disney World Resort in Orlando, Florida.
The theme parks, and their related consumer products, are an increasingly important part of the company. In the year ending September 2018, the division had a chunky 25% operating margin and represented almost 40% of Disney’s total operating profit of $16 billion. The company’s TV and cable assets, like ESPN, are declining. And so, Disney will lean evermore on the theme parks to help it boost profit, and offset losses from the company’s streaming video division. By 2024, the parks, experiences and consumer products’ margins are expected to increase to 30% while accounting for two-thirds of Disney’s operating profit, according to estimates from Goldman Sachs.
In that way, Disney has the blocks for its metaverse. Take the Star Wars franchise. It has spawned over 10 movies, several TV series for the flagship streaming service Disney+ and serves as the backdrop at Disney World for Star Wars: Galactic Starcruiser, a two-night immersive experience that mimics life in the faraway galaxy. Creating an augmented reality-based world next is not that far-fetched.
That, however, requires beating a company like Meta Platforms, which is already spending on its version of the metaverse, to the punch. Disney Chief Executive Bob Iger, who is at his second stint at the helm, will have to hand the reins to someone who can oversee the transition. Tim Sweeney who is ahead of the curve as boss of “Fortnite” owner Epic Games, or former Meta executive Carolyn Everson, who is on the Disney board, could lead the way. For the Magic Kingdom, the next century hinges on the virtual world.
