Rumored Disney problems

Well, this article in the Orlando Informer is pretty much doom and gloom for Disney.  The premise of the article is that Disney has spent so much money on the MyMagic+ system, also called NextGen,  that it will have serious consequences down the road. The system has reportedly experienced many bugs and implementation problems, and the cost of fixing these problems is causing things like cancelling plans for Star Wars Land.

The amount of damage this is starting to inflict on the company cannot be overstated. The program has been in development for at least the past five years, with the last two years starting to incur real costs as it continues to tie up more and more R&D dollars and man-hours. Disney’s financial types were counting on the initial roll-out this year to start to boost Disney World’s revenues in 2014, as guests are expected to spend more time on property and more money on souvenirs once every minute detail of their vacations have been planned months in advance and with wallet-less transactions making money out of sight, out of mind. The loss of that revenue is damning; the fact that even more now has to be spent on further patches and upgrades is downright disastrous. (And this is just for Orlando – forget about shipping NextGen to all of the other resorts all across the globe, as was expected to be happening in the very near future.)

Several of us have just returned from WDW and used the My Disney Experience app with the Magic Bands.  Guest Relations seemed to be able to handle questions and problems related to the system pretty well.  The system seemed to be working ok and the Magic Band was convenient to use. You could put the Sorcerers of the Magic Kingdom key card and Disney Photopass info on the band, although the system is not 100% rolled out as yet.

The issue that the article is addressing is whether so much money has been spent on NextGen that important additions and upgrades to the parks aren't happening.  But, the money spent on NextGen isn't necessarily in the same budgeting category as capital spending on the parks, and there may be significant tax breaks for the r&d time spent.  As has been talked about since more became known about the NextGen system, the difference in approach between Universal and Disney is striking.  Universal is adding and upgrading attractions, and this could begin to seriously draw people away from WDW.  But, the WDW parks are very busy and, at least on the surface, there is no sign that this scenario is happening.