How ‘Ne Zha 2’ Became Animation’s Box Office King and China’s Biggest Film Triumph

On the last weekend of August 2024, “Inside Out 2” surpassed the 2019 remake of “The Lion King” to become the highest grossing animated film of all time, landing just shy of $1.7 billion worldwide. Less than six months later, its reign has come to an unexpected end at the hands of “Ne Zha 2,” the biggest film hit in Chinese history.

In just three weeks, the animated sequel from director Jiao Zi and the studio Chengdu Coco Cartoon has outgrossed its Pixar counterpart almost entirely from audiences in China, turning out to the tune of more than 250 million tickets sold over the course of the Lunar New Year holidays. With more than 12 billion yuan grossed, or $1.7 billion U.S., “Ne Zha 2” has become the first non-Hollywood production in history to rank among the top 10 highest-grossing films of all time.

While its anticipated that box office returns for the movie will drop substantially with the Lunar New Year period concluded and kids in China back in school, “Ne Zha 2” has plenty of momentum to become the seventh film in history to gross $2 billion worldwide. In doing so, it is on pace to pass the unadjusted global theatrical runs of two of the biggest hits of the past decade: “Star Wars: The Force Awakens” and Marvel’s “Avengers: Infinity War.”

It’s been since 2017 that Hollywood movies peaked at the Chinese box office, taking a steep dive in 2020 from which it has never recovered. In the meantime, China has found its way forward by relying on a growing domestic movie industry.

The unprecedented performance of “Ne Zha 2” can be traced to a mix of factors, some of which are similar to trends Hollywood has seen play out with its even deeper lean into franchises and familiar IP. But above all else, “Ne Zha” has reached this point as a result of more than 15 years of building China’s film production and exhibition, culminating in an animated sequel rooted specifically in Chinese mythology and tradition, delivered with a production quality on par with Disney, Pixar or DreamWorks.

Still, few, if any, in China’s film industry could have predicted this level of success. Peter Han Lu, managing director of the Sichuan-based Central Spring Cinema Investment & Management Company, told TheWrap that prior to the start of 2025, it was expected that the ceiling for the year’s films was probably around 10 billion yuan ($1.4 billion), a benchmark that “Ne Zha 2” has left in the dust.

“Whether it is the plot, the technology, the visuals, it is a complete film beyond one’s wildest imagination,” Lu said, adding that the investment in the production — including the scale of the fighting sequences — “paid off big time.”

Released in 2019, “Ne Zha” offered a new spin on a classic Chinese myth from the book “Investiture of the Gods.” In this version of the tale, Ne Zha is an impish, big-toothed demon child imbued with fire powers by a magical orb that curses him to die in three years. Despite the patient training of his parents, he struggles with his demonic nature and is shunned by the people of his town.

Despite this, Ne Zha overcomes the fate that was laid out for him, saving his village with the help of Ao Bing, the son of the evil Dragon King, who becomes Ne Zha’s only friend. In the sequel, Ne Zha must face the Dragon King to not only save his kingdom but bring down the world of gods and demons that seeks to define him.

Though it was a debut film for its director and studio and had no A-listers in its voice cast, “Ne Zha” was a summer hit six years ago and grossed 5 billion yuan ($719 million), enough at the time to make it the second-highest-grossing Chinese production behind only the action film “Wolf Warrior 2.”

In the years that followed, “Ne Zha” enjoyed a similar boost that Hollywood films like “Moana,” “Inside Out” and “Spider-Man: Into the Spider-Verse” did with their run on home platforms, steadily building a devoted fanbase among kids that would be excited to buy an opening-weekend ticket for a sequel. This is how “Moana 2” shattered the five-day Thanksgiving weekend record with a $224.5 million start last November, 275% higher than the $82 million Thanksgiving weekend for the first Moana in 2016.

The same “breakout sequel” phenomenon is at play with “Ne Zha 2,” but on a significantly higher level. American families have turned out in greater numbers for animated sequels time and time again, but Chinese families have never had the chance to do so for a top-quality animated film made specifically for them and their culture.

With even stronger audience appeal during a Lunar New Year period that encouraged repeat viewings, “Ne Zha 2” had eight days, including six in a row, where its daily gross cleared the previous single-day Chinese box office record of approximately 600 million yuan set by the 2021 time-travel comedy “Hi, Mom.”

With the help of two other holiday sequels, “Detective Chinatown 1900” and “Creation of Gods 2,” the annual box office in China has reached $2.75 billion in just 53 days. It took all of the first quarter for the country to reach that mark in 2024.

The question now is whether this unprecedented cultural phenomenon can lead to more consistent box office output, something that has proved elusive for theaters in China just as it has in the rest of the world. In 2024, Chinese box office grosses only reached $5.8 billion, a 23% drop from the year before. At the start of 2025, Gower Street Analytics projected an improved 2025 for China with $6.6 billion, a figure that will likely be revised upward following the success of “Ne Zha 2.”

“Since the pandemic, the Chinese box office has not been like the U.S., which has been mostly up, up, up,” Daniel Loria, SVP of Content Strategy at The Boxoffice Company, said. “It has been up and down over the past three years.”

Part of this has been the same problem dealt with by theaters elsewhere: the pandemic has recalibrated what sort of films Chinese moviegoers deem worth spending the time and money to see on the big screen and which they decide to wait to see on streaming. This is exacerbated by a recent rise in youth unemployment that has walloped consumer confidence and spending among young adults.

“The cost of living for Chinese residents has risen, the prices of major assets have fallen and consumption has declined,” Lu Han said. “Coupled with high ticket prices, the audience has become more stable in consumption and more picky about their movie choices.”

In part because of that pickiness, and also because of the state-dictated nature of how the release slate in China is scheduled, it is difficult to pinpoint which films could be major moneymakers in the months ahead save possibly for James Cameron’s “Avatar: Fire and Ash,” a sequel to the 2022 film “Avatar: The Way of Water,” which grossed $246 million in China.

With its breakout results, “Ne Zha 2” has radically expanded the possibility for a Chinese film to capture a country’s imagination, deliver Pixar/DreamWorks-level thrills and craftsmanship while permeating the national consciousness in a way that could become the guiding star for a growing local animation industry.

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