Oh no! Disney will not be a part of the third installment of C. S. Lewis’ Narnia series:

“The Chronicles of Narnia: The Voyage of the Dawn Treader” will have to sail without Disney.
While declining to elaborate, Disney and Walden Media confirmed Tuesday that for budgetary and logistical reasons the Burbank-based studio is not exercising its option to co-produce and co-finance the next “Narnia” movie with Walden.
The third entry in the series, based on the classic books by C.S. Lewis, was in preproduction and set for a spring shoot for a planned May 2010 release.

It appears that the market for children’s fantasy movies has waned. The second movie didn’t do as well as the first, it still made money but not as much, though it did come out during the summer while the first installment came out at Christmas. Maybe weak DVD sales contributed to the decision.
Walden will need a new partner since the series is very expensive to produce, the Hollywood Reporter thinks that might be Fox since Fox distributes Walden’s films.
Obviously, I’m pretty bummed about this. I hope “The Voyage of the Dawn Treader” will still be made and that the same actors will recreate their roles (they might not want to do it if Disney isn’t involved), my daughters really enjoyed the series.