This was a seismic shock to the animation industry. Disney cited the economic pressures of the COVID-19 pandemic and their existing roster of animation houses (Walt Disney Animation and Pixar). Approximately 450 employees were laid off, and Blue Sky’s final film, Nimona , was cancelled (though later picked up by Netflix).
While Rio 3 remains unconfirmed, the landscape of Hollywood has shifted dramatically since 2021. We are currently in the age of "legacy sequels" and franchise revivals. Disney, specifically, has seen massive success by reaching back into its vaults.
The death of Blue Sky Studios was a tragedy for animation, but the characters of Blu and Jewel exist in Disney's vault. The question is not whether a story exists (it does—Saldanha has one), but whether Disney’s accountants believe that story is worth telling.
Jim Hecht, known for his work on the Ice Age franchise, is officially attached to write the screenplay.
For years, the prevailing rumor was that a script existed. In 6, a notable development occurred when Bob Barlen, one of the writers associated with the franchise, took to Twitter (now X) to address the fans. He confirmed that a script for Rio 3 had indeed been written. This was a crucial piece of news; it proved that the creatives behind the films were interested in continuing the story. However, having a script is vastly different from a studio greenlighting a multi-million dollar animated feature.