Should Disney Be Worried About Ne Zha 2’s Success?

There’s an original Chinese-animated film that’s been tearing through the box office over the last couple of months, beating out Disney and other major North American animation studios. Ne Zha 2 has been conquering and breaking records during a period when the House of Mouse has been suffering. Should the veteran animation giant be worried about being toppled?

It’s safe to say that Disney has had a rough time in recent years. Under the original tutelage of Disney CEO Bob Iger, the company expanded massively in the 2010s to become Hollywood’s largest blockbuster juggernaut. This has brought with it a sweeping period where Disney has owned and dominated many popular brands, such as Marvel, Star Wars, and many other franchises through the acquisition of 20th Century Fox. However, the past few years have been less than normal for the conglomerate. The many flops of Star Wars’ sequel saga have become harder to ignore as Disney’s crown jewel, the Marvel Cinematic Universe, has also floundered and lost its way in a post-Infinity Saga era. Its animated division has also declined massively. Walt Disney Animation Studios’ 2010s renaissance has long since ended, and the company’s main studio has simply opted to focus on rebooting its classic productions in a series of recycled live-action remakes. The overall decline in quality has started to have financial ramifications for Disney. With all this turmoil, the corporation would be wise to keep its eye on emerging powerhouses like Ne Zha 2.

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Ne Zha 2 recently soared to new heights with Variety reporting that the animated film has literally raised the ceiling for the overall global box office projection this year. Gower Street Analytics released a new prediction that set the 2025 worldwide box office intake for $34.1 billion; a sudden spike up from its estimate of $33 billion in December.

Ne Zha 2 was released earlier this year as a sequel to its 2019 predecessor, continuing the tale of a rebellious demon child from Chinese mythology. This action-adventure comedy has captured the hearts and minds of Chinese audiences, grossing over $2 billion since its release and setting a record as the highest-grossing animated film in history.

Disney’s Box Office Is Faltering In The Face Of Ne Zha 2’s Success

Disney has struggled post-COVID to boost its box office intake and get audiences back into theaters. 2023 and 2024 were both tough years for Marvel, as two of their biggest and most expensive projects, The Marvels and Ant-Man & The Wasp: Quantumania, ended up being financial losses for the company. The total production costs for both films amounted to $637.5 million. Unfortunately, they only received a combined box office intake of $682.2 million worldwide. Once the cut usually given to theaters was subtracted, it left Disney with a measly $341.1 million.

Alas, box office bombs have not been contained to superhero outings. It’s indicative of a wider problem for the company. The decision to remake Disney’s very first animated feature film, Snow White and the Seven Dwarfs, felt strangely uneventful. This could be fairly attributed to the burnout audiences are beginning to feel from the relentless outpouring of reboots in favor of original films. The model of live-action reimaginings was extremely financially lucrative for a time, and that is probably why Disney pursued the creative direction so intensely, but Snow White (2025) has stumbled on release. It has underperformed in ticket sales, earning $142.8 million following its debut, falling well behind its projected figures.

Meanwhile, Ne Zha 2 is dominating China’s box office. Their overall national box office projection leaped from $1 billion to $7.6 billion, thanks almost entirely to the animated feature. Disney still has the capacity to sway global and domestic markets this way, but it has lost a step in its ability to have such a seismic influence.

Is North American Animation In Trouble, Or Does Disney Stand Alone?

Despite the dominance of Ne Zha 2, animation in the North American market is doing reasonably well. On television, animation is still very much pushing the boundaries of what the medium is traditionally used for. Arcane: League of Legends is one of the most popular shows on Netflix and is a critical darling among reviewers. Invincible on Prime Video is going toe-to-toe with The Boys as one of the most popular pieces of media to put a darker twist on the current superhero trend. In the film landscape, popular studios like Dreamworks and Sony Animation Studios are keeping things fresh with original releases. The Wild Robot made $333.8 million off of a small $78 million budget, and the Spider-Verse franchise has risen to critical and commercial acclaim. Disney’s Pixar even had a box office hit with Inside Out 2 recently, as the film grossed almost $1.7 billion. But this was broadly seen as an anomaly when compared to Pixar’s other releases, which struggled towards the beginning of the 2020s (with COVID-19 and a rise in streaming services quite obviously being the culprit here).

The creativity and appetite for animation may not be as strong as the Chinese market at present, but it still exists. This is not a case of an industry-wide endemic lack of imagination, but a tale of one large corporation’s mismanagement and the prioritization of financial revenue over a creative vision. If Disney wanted to, it could invest in its animated division heavily and mount a large challenge to the creators of Ne Zha 2, Beijing Enlight Pictures. But its short-sightedness and desire to extract as much capital out of nostalgic audiences as possible has diminished its overall prowess in the animation scene. It may already be too late for Disney, as the distance between its current releases and hits like Ne Zha 2 seems almost insurmountable.