Disney has a theme park plan to take on Harry Potter (and maybe Nintendo)
For decades, Walt Disney (SAY) – Get The Walt Disney Company Report invested very little in its theme parks. Entire sections of Epcot fell into disuse when corporate sponsorships ended, and instead of new rides, the company added character meet-and-greets.
The lack of innovation came because Walt Disney World and Disneyland had no meaningful competition. Yes, Comcast (CMCSA) – Get the Class A report from Comcast Corporation Universal Studios existed, as did SeaWorld (SEAS) – Get the report from SeaWorld Entertainment, Inc.but these companies had not invested at the level required to force Disney to invest a lot of money in its parks.
In many ways, Disney theme parks have been frozen in time, and that’s not all that unique to the theme park business. Traditional regional theme parks and traveling carnivals roll out the same rides every year with perhaps the occasional new attraction.
Disney had done the same because Universal Studios had followed much the same strategy until it launched The Wizarding World of Harry Potter at its namesake park in 2010. This addition raised the standard for theme parks in general. It was more than a new ride. Wizarding World was an immersive, fully themed land, and it sparked a theme park arms race.
Universal Studios pushed Disney to invest
Disney has responded to Harry Potter, which now has land at Universal’s two parks in Florida, with Pandora’s Land from the movie “Avatar” at Disney’s Animal Kingdom and Toy Story Land and Star Wars: Galaxy’s Edge at Disney’s Hollywood Studios. .
These two expansions follow the Harry Potter model. It’s not just a collection of rides, restaurants and gift shops. Instead, these new additions are fully immersive worlds where – at least for Galaxy’s Edge and Pandora – you literally can’t see the real world.
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Universal wants its park to be a vacation destination rather than a day visit during a family trip to Disney World. To do this, Comcast added the Volcano Bay water park and a steady stream of new rides with the two Harry Potter Lands. The company also began construction on Epic Universe, a third theme park that would entice people to stay at its on-site hotels like they do at Disney.
The new park may include a third Harry Potter land and it will almost certainly house a land themed around the popular Nintendo character. Universal Studios Japan has launched rides based on Super Mario Bros. Mario Kart, Yoshi, and Bowser Jr. Universal has not confirmed any specific Epic Universe attractions.
Basically, Universal wants to become the default family vacation option, and in trying to become that, they’ve awakened a sleeping giant.
Disney has big plans to take on Harry Potter and Universal
Disney has spent a lot since the arrival of Harry Potter to give consumers a reason to visit its parks beyond nostalgia. New rides and grounds encourage repeat visits and – perhaps most importantly – help Mouse House stay ahead of its rival. That’s why Walt Disney Chief Financial Officer Christine McCarthy has made it clear that the company will continue to invest heavily in its US theme parks in 2022.
“At the DPEP [Disney Parks, Experiences, and Products]we expect spending per cap at our national parks in fiscal year 2022 to continue to significantly exceed pre-pandemic levels, and we are particularly encouraged by the rapid response we are seeing to Genie at Walt Disney World “, she said during the company’s fourth meeting – call for results for the quarter.
McCarthy also noted that the company’s money wouldn’t go as far as it used to for a variety of reasons.
“However, we also anticipate that while we continue to pursue strong cost mitigation efforts, certain costs will be elevated in FY22 compared to pre-pandemic levels, including, for example, pressure inflationary on salaries, costs related to new projects and initiatives such as Star Wars: Galaxy’s Edge, Avengers Campus and the Epcot expansion,” she said.
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