The next Star Wars movie, The Mandalorian & Grogu, has a much smaller budget than recent films in the franchise, and there are a few major reasons why. The next Star Wars movie set to release in 2026, the upcoming film The Mandalorian & Grogu, has been a subject of speculation since it was announced. News about the film has slowly been released over months, such as cast updates for The Mandalorian & Grogu, which is set to include stars like Sigourney Weaver and Jeremy Allen White. One new bit of information, however, is a mᴀssive development for both The Mandalorian & Grogu and Star Wars as a whole.

Star Wars, as a film franchise, has always been interested in creating blockbusters that draw in huge crowds and huge profits from the box office. Recently, that means the franchise has put down huge amounts of money to each new film’s budget. However, a new report shows that The Mandalorian & Grogu‘s budget is just $166.4 million. That’s less than most blockbusters in the last several years: the two highest-grossing movies of 2024, Inside Out 2 and ᴅᴇᴀᴅpool & Wolverine, both had budgets of about $200 million (via Box Office Mojo). The Mandalorian & Grogu‘s budget is truly remarkable, and it may need some explanation.

How The Mandalorian & Grogu’s Budget Compares To Other Disney Star Wars Movies

The Mandalorian & Grogu Has The Smallest Budget In The Disney Star Wars Era By Over $30 Million

The Mandalorian & Grogu‘s budget is surprisingly small even among most modern blockbusters, but it’s even more surprising in comparison to Disney’s history with Star Wars specifically. The Mandalorian & Grogu is the cheapest Star Wars movie Disney has ever made, with a budget $33 million lower than the next cheapest, Rogue One: A Star Wars Story. In fact, it’s the only Disney Star Wars movie to cost less than $200 million to produce, and the numbers are even more staggering after adjusting for inflation. In 2025, Rogue One would have a budget of $273 million, meaning The Mandalorian & Grogu is over $100 million cheaper.

Adjusting for inflation also reveals that The Mandalorian & Grogu is even cheaper than some of George Lucas’ Star Wars films. Star Wars: Episode I – The Phantom Menace, for example, would have cost $227 million to make today, or more than $60 millon more than The Mandalorian & Grogu. It’s a staggeringly small budget for a Star Wars film, and there were a few ways The Mandalorian & Grogu was able to achieve such a small price tag.

Jon Favreau Used The Volume To Keep Costs Under Control

Some Of The Best Examples Of The Volume In Action Are Favreau’s Doing

A big reason The Mandalorian & Grogu‘s budget is so low compared to other Star Wars movies is because director Jon Favreau has used the Volume for filming. The Volume was developed by Industrial Light and Magic and is essentially a large LED screen that wraps around a sound stage and allows filmmakers to put whatever background they want on it. In broad strokes, the Volume is a more modern alternative to filming with a green screen, which has been the Hollywood standard for years, and it’s also far cheaper than any other large-scale filming method.

For example, the scenes set on Tatooine in the original Star Wars were sH๏τ on-location in places like Tunisia or Death Valley. If The Mandalorian & Grogu were to film on-location in those places, a handful of sH๏τs would cost hundreds of thousands – if not millions – of dollars just to transport all the cast and crew there, secure permits and filming rights, set up all the equipment, and film in harsh desert conditions. The Volume, however, allows The Mandalorian & Grogu to bring Tatooine onto a sound stage, completely eliminating all the travel costs and production delays that filming on-location entails.

The Volume also cuts down on the price of filming in a studio. Modern day filmmaking relies heavily on CGI for everything from fantastical creatures to otherworldly locations. A green screen is used to film in a studio, and digital artists edit the footage to change that green to something like Mos Eisley Cantina, in Star Wars‘ case. Hiring digital artists and having them create backgrounds is quite pricey, though, and the Volume eliminates that need almost entirely. With the Volume, The Mandalorian & Grogu can include whatever background it wants as it films, and the footage will only need some light and inexpensive touching-up after the fact.

It’s also worth noting that Star Wars, Industrial Light and Magic, and Jon Favreau himself pioneered the Volume and the technology it employs. The first scene of The Mandalorian, when Din is on the ice planet Pagodon, was filmed in the Volume, and it still looks marvelous six years later. Favreau and the rest of the team have been using the volume for over half a decade, which should mean they can use it extremely well. They should be able to avoid some of the worst examples of filming in the Volume, like some of the more uncanny-looking sH๏τs in Obi-Wan Kenobi.

Lucasilm Has Learned One Key Lesson From The Star Wars Sequel Trilogy

The Mandalorian & Grogu Has A Clear Plan & None Of The Rewrites & Reshoots Of The Sequel Trilogy

Along with the Volume, Lucasfilm and Disney seem to have learned a mᴀssive lesson from the Star Wars sequel trilogy. One of the main reasons the sequel trilogy was so expensive to produce is because there wasn’t much of a plan in place before filming. Movies like Solo: A Star Wars Story and Star Wars: The Rise of Skywalker went through numerous rewrites, reshoots, and general overhauls in their production process, all of which cost money. The confusion about how to finish out Rey Skywalker’s story and Solo‘s numerous director troubles ended up ballooning their respective budgets.

With The Mandalorian & Grogu, however, there doesn’t seem to be any such confusion. The movie is written and directed by Jon Favreau, who created the characters it’s based on and has been writing about them for half a decade now. It also has three seasons of The Mandalorian as precedent, so there’s a fairly clear sense of who these characters are and what The Mandalorian & Grogu should be about. The Mandalorian & Grogu already has a plan, which should help it stay on schedule and avoid costly reshoots and rewrites.

Has Disney Finally Learned George Lucas’ Greatest Trick?

Lucas Became A Billionaire By Making Wildly Successful Movies On A Shoestring Budget

This astonishing news about The Mandalorian & Grogu‘s budget may even signify that Disney has finally learned George Lucas’ greatest lesson about filmmaking. With the original trilogy, George Lucas famously made tremendous amounts of money, and it turned Lucas into the richest celebrity in the world, to the tune of $5.5 billion. While the actual box office takings of the original trilogy and the revenue from Star Wars‘ various merchandising efforts helped, the real secret of Lucas’ success wasn’t making movies that made a lot of money, it was making movies that made much more than they cost.

For example, the original Star Wars cost just $11 million to produce ($63 million today), but it made a whopping $4.5 billion after adjusting for inflation. Conversely, Disney’s most profitable Star Wars movie to date, Star Wars: The Force Awakens, made a huge amount of money ($2.7 billion adjusted for inflation), but it also cost $334 million adjusted for inflation, or five times as much. With The Mandalorian & Grogu, it seems like Disney may have finally followed George Lucas’ lead and decided to keep the initial costs of production low to increase the movie’s return on investment.