Disney is having the kind of theatrical year that makes the old Disney machine look almost indestructible again, with Pixar’s Toy Story 5 crossing $1 billion worldwide and becoming the studio’s biggest global release of 2026 so far. The fifth Toy Story opened to $312 million globally, while The Devil Wears Prada 2, released through 20th Century Studios, has climbed toward $700 million worldwide, helping Disney’s broader theatrical portfolio ride a resurgent box office year. 

It is a striking reminder of Disney’s extraordinary ability to turn familiar characters into billion-dollar theatrical events, but the company has not always been quite so careful with the studios creating those characters.

And one of the most revealing examples is a studio whose most famous creation spent decades chasing an acorn.

Fox had acquired control of Blue Sky in 1997, and the studio eventually became part of 20th Century Fox Animation. That relationship produced enormous commercial rewards, but it also created the structural vulnerability that eventually mattered. Blue Sky was no longer controlled by the artists who founded it. Its survival depended on decisions made higher up the corporate chain, including decisions about franchises, budgets, and production priorities.

Disney completed its $71.3 billion acquisition of most of 21st Century Fox in March 2019, inheriting Blue Sky alongside a vast library of films and franchises. Suddenly, Disney had Walt Disney Animation Studios, Pixar and Blue Sky under the same corporate roof. On paper, it looked like an embarrassment of animation riches. In practice, the three-studio structure became difficult to justify when the COVID-19 pandemic devastated theatrical exhibition, theme parks and Disney’s wider entertainment operations.

 In February 2021, Disney announced that Blue Sky would close in April, citing the economic realities created by the pandemic and concluding that operating a third feature-animation studio was no longer sustainable. Approximately 450 employees were affected. 

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And that distinction matters when looking at Disney today, because the company still owns the very kind of animation ecosystem Blue Sky might once have complemented.

Blue Sky Studios was never simply another animation house waiting for a corporate parent. Founded in 1987 by artists including Chris Wedge, the Connecticut-based company emerged from the remnants of MAGI, one of the pioneering computer graphics companies behind Tron.  Wedge’s Bunny eventually won the Academy Award for Best Animated Short Film in 1998, giving the studio an Oscar before it had even produced its first feature. Then came Ice Age. 

Released in 2002 when computer animation was still dominated by the emerging Pixar and DreamWorks rivalry, the film turned a prehistoric road trip involving Manny, Sid, Diego, and a constantly endangered baby into a $383 million worldwide hit. By the time Disney inherited Blue Sky through its 2019 acquisition of 21st Century Fox, the studio had talent, technology, and valuable intellectual property, but it also had a complicated corporate history.

That is where the Blue Sky story becomes more about a recurring Hollywood problem: ownership can preserve a library while slowly losing sight of the culture that created it.

Disney now operates an extraordinary collection of filmmaking brands. Walt Disney Animation Studios continues its century-long legacy, with Zootopia 2 becoming another billion-dollar animated phenomenon, while Pixar remains the company’s prestige computer-animation operation. Disney also controls Marvel Studios, Lucasfilm, 20th Century Studios and Searchlight Pictures under its broader studios organization. The current Disney model is therefore more about managing an enormous portfolio of established intellectual property.

That strategy is visibly working in 2026. Toy Story 5 became the biggest global opening of the year with $312 million and has since passed $1 billion worldwide. Yet the Blue Sky question remains fascinating because Disney did not eliminate the value of Ice Age. It eliminated the studio that had built the franchise. Disney is now preparing Ice Age 6: Boiling Point for 2027, demonstrating that the intellectual property still has commercial life even though Blue Sky itself does not. The contrast is almost painfully neat: the acorn survived, but the people chasing it were scattered.

Today, Disney can point to Toy Story 5, Pixar, Disney Animation and a resurgent theatrical business as evidence that its strategy works. Yet Blue Sky remains a fascinating cautionary tale about the difference between owning intellectual property and preserving creative identity. Scrat eventually got his acorn. Blue Sky never got the same happy ending.

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What do you think? Was Disney’s decision to shut down Blue Sky a necessary pandemic-era business move? Share your thoughts in the comments.