Disney is in an animation slump after 'Strange World' and 'Lightyear' flopped. Bob Iger may have the magic touch to turn it around.

• Disney's "Lightyear" and "Strange World" have flopped at the box office this year.
• Analysts says it's a combination of the movies themselves and potential consumer confusion.

Disney has been a dominant force in animation for decades, but it's now facing a rare slump in the genre with two back-to-back box-office misfires.

Its latest animated movie, "Strange World," opened over the Thanksgiving weekend with $18 million over the five-day holiday in the US. It's earned a total of $28 million worldwide.

That's a lackluster start for a movie that cost $120 million make, according to IMDb Pro. Variety reported that it could lose at least $100 million in its theatrical run.

Earlier this year, Disney released "Lightyear," the first Pixar movie since the pandemic to debut exclusively in theaters after the prior three — "Luca," "Soul," and "Turning Red" — premiered on Disney+. "Lightyear" flopped, earning a total of $226 million worldwide ($118 million in the US) on a $200 million budget.

Disney's animation slump could extend further back. This time last year, Disney released "Encanto," which earned $40 million over the long weekend — and even that was considered disappointing by Disney standards.

And before that, "Raya and the Last Dragon" opened to just $8.5 million in its first weekend, though it was also streaming on Disney+ for an additional fee at the time.

But last year was a different story. The theatrical industry was still in recovery mode, and studios were experimenting with distribution strategies.

This year was the first real test of the pandemic era to see if Disney's animated films could attract large swaths of consumers to theaters.

So, what's going on?

"A lot of it comes down to the movies themselves," Shawn Robbins, chief analyst at Box Office Pro, told Insider.

"'Lightyear had the IP, but at the end of the day audiences weren't looking for a spinoff about Buzz Lightyear that wasn't even the same Lightyear they knew from 'Toy Story,'" Robbins said.

Paul Dergarabedian, Comscore's senior media analyst, agreed. He pointed to other family movies this year, like "Sonic the Hedgehog 2" and "Minions: The Rise of Gru," that were box-office hits.

The marketing and distribution strategy also helped those films, he said.

Each of those films had clear, exclusive theatrical releases. In other words, audiences weren't going to find "Sonic 2" on Paramount+ or "Rise of Gru" on Peacock right away.

In 2020 and 2021, Disney's animated movies either went straight to Disney+ or received a hybrid release on streaming and in theaters.

But this year, Disney's movies have typically been released in theaters for 45 days before debuting on the streaming service.

"There's no question that if there's any consumer confusion, that can be problematic," Dergarabedian said.

The future may be bright for Disney animation

Analysts are hopeful for the future, though. Disney will release Pixar's "Elemental" next year, as well as Disney Animation's "Wish" over the 2023 Thanksgiving weekend.

Next year also marks Disney's 100th anniversary, and Robbins said "Wish" is likely to be a "celebration" of that: "It sounds like a hit on paper," he said.

They're also optimistic about Bob Iger's return to the company.

Iger recently returned to the CEO role he left in 2020, replacing his successor, Bob Chapek.

Robbins suspects Iger will ensure that different divisions "have more of a say in where their content goes," pointing to the fact that the CEO has already started making structural changes at the company.

While it's unclear if the decision to greenlight "Strange World" and "Lightyear" came from Iger or Chapek, the distribution decisions were made under Chapek's watch.

Iger's passion is the creative side of the company — and particularly revered family-friendly content — and he remained at the company for a time as executive chairman to oversee those efforts after stepping down as CEO. Chapek, meanwhile, didn't seem to have an appreciation for the genre that put Disney on the map.

During The Wall Street Journal's Tech Live conference last month, Chapek seemed to diss animated films.

"I always say that when our fans and our audiences put their kids to bed at night after watching 'Pinocchio' or 'Dumbo' or 'Little Mermaid,' they're probably not going to tune into another animated movie," Chapek said. "They want something for them."