Disney's latest Star Wars theatrical release, 'The Mandalorian and Grogu,' experienced a dramatic 70% drop in its second weekend at the box office, placing it third behind two low-budget horror films directed by young YouTube creators.

'Backrooms,' directed by 20-year-old Kane Parsons, and 'Obsession,' directed by 26-year-old Curry Barker, have both captured significant attention from younger audiences under 35, particularly those under 25.

Despite their modest production budgets of roughly $10 million and $1 million respectively, 'Backrooms' has already grossed $118 million globally, while 'Obsession' has earned $148 million worldwide.

Analysts note that these indie horror successes are not cannibalizing each other’s audience but are instead benefiting from the viral influence of their creators’ online fanbases.

Industry experts suggest that the Star Wars film may struggle to reach profitability solely through theatrical revenue, though merchandising and streaming platforms could mitigate losses.

Disney is hoping that next summer’s 'Star Wars: Starfighter,' directed by Shawn Levy and starring Ryan Gosling, will revitalize interest in the franchise.

The trend highlights a shift in audience preferences toward self-contained, innovative stories from new media creators, challenging traditional blockbuster expectations.