It’s been revealed that Walt Disney has pulled out of co-producing and co-financing the third film in The Chronicles of Narnia franchise, subtitled The Voyage of the Dawn Treader. The reasons are unclear but were described as “budgetary and logistical.”

With the under-performance of the last film, Prince Caspian, I’m not surprised that Disney has decided to pull out. If you’re a regular Screen Rant reader this news won’t be a complete surprise. Fellow writer Jamie Williams predicted back in May that Dawn Treader was probably not going to be made.

The further they delve into these stories the more expensive they are going to be to make, and with a diminishing return this may be a good call.

People headed out in droves to see the first film The Lion, The Witch and the Wardrobe – which made $292 million domestically and another $453 million internationally back in in 2005, but the Prince Caspian sequel, although still making a profit made far less than was hoped for, taking in a disappointing $141 million domestically and another $278 million internationally (so the first film made more money just internationally than the second one made altogether).

I think Disney has seen the warning signs along the road and decided to take the first turn off it before it reaches what looks like a financially messy situation. If they made a third film, I wouldn’t be surprised if it actually lost money.

The film is currently set for a May 2010 release but with Disney now not on-board it doesn’t look great for Walden Media and this third film in general. Walden is currently snooping around for another company to help finance/distribute and reports suggest it will most likely end up being Fox as they already market and distribute Walden fare under the Fox Walden banner.

But this means that the involvement of certain people with the project, such as the director Michael Apted (The World Is Not Enough) and writer Steven Knight (Eastern Promises) might be in jeopardy. I don’t think it’s in doubt that the key actors from the previous installments will be back to serve continuity but you just never know; the movie business is an unpredictable thing.

What do you make of this news? Are you  fan of the Narnia series so far and upset that things aren’t going smoothly for the third installment?

Sources: ComingSoon.net and The Hollywood Reporter