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The wonderful (and well-received) 2020 Hulu movie Palm Springs ends on an ambiguous note, especially when you consider the mid-credits scene that follows.

So how should it be interpreted?

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Josh Rottenberg sums it up well in this Los Angeles Times article on the movie:

So what does it all mean? Have Sarah and Nyles broken free from the time loop to live happily ever after? Or have they jumped into a different dimension in which they ultimately might end up stuck in the kind of dead-end marriage that they both fear?

Are they dead and eternally chilling in some kind of poolside afterlife? Or are there now two different Sarahs and Nyleses in two parallel timelines? And what is up with those dinosaurs?

He decided to ask the movie's makers:

If you were hoping for a single definitive answer from the film’s creative team, you’re out of luck. The ending was deliberately designed so that it could be viewed in different ways. How you read it will depend on personal beliefs about not just things like string theory and the possibility of alternate universes but the existence of true love itself.

“The intention was always to create an ending that was open to interpretation, where you could arrive at different conclusions about what had happened depending on how you were looking at the world, whether that was in a more optimistic or a more cynical light,” director Max Barbakow says. “I think we all think different things happen after we pull away from that pool. That’s the fun of it. Whatever you wanted to get out of an ending, you can get out of it.”

Except that originally its ending was more explicit:

In early versions of the script, screenwriter Andy Siara says, “it was a little more clear what maybe the main interpretation could be.” But after Samberg came on board, he and his Lonely Island producing partners, Akiva Schaffer and Jorma Taccone, helped push the film’s conclusion in a more ambiguous direction.

Which apparently was something of a trial and error process:

“We definitely talked about the ending a lot,” Samberg says. “There were many iterations written and even many iterations shot and cut together and screened for small friends-and-family screenings.”

And this ambiguous ending has a purpose:

The goal all along was to land somewhere in the space between a traditional sort of pro-love-and-marriage rom-com happy ending and a slightly darker, more open-ended one that reflects the uncertainty of any romantic venture. “It was a real push-and-pull,” Samberg says. “We didn’t want the ending to feel saccharine, like, ‘Yay, everything works out!’ That felt untrue to the tone of the movie and the promise you had made with the characters. But at the same time you don’t want to end on a note that’s bitter and depressing. It was a delicate balance.”

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The way I'd see it considering what we were shown in the film is that the final scene is not set in the day of the loop, 9th Nov. They have chilled in that pool many times and on the 9th Nov, that family is not home. The final scene shows that they have returned. Which means it's the following day, showing us that Nyles and Sarah have broken out of the loop. The two of them also retain the cumulative memories from all their loops.

About Roy. He's still on the 9th Nov loop. He meets Nyles. This Nyles is no longer looping. That means the cumulative memories have progressed to the 10th along with the Nyles who is now free. The Nyles that we see in Roy's loop has not lived that day yet. He's meeting Roy for the first time and hence doesn't recognize him. This is proof for Roy that the "exit strategy" that Sarah leaves as a message to him on the phone has worked. He smiles because he too can escape.

Finally, the dinosaurs. I feel they are metaphorical. They are shown hazily. Think about Sarah's and Nyles' perspective. They have lived years in the loop. She learned Quantum Physics via distance learning, which must have taken ages. Nyles has been looping for decades before Sarah. Their own actual lives are going to be such a distant, hazy memory that feels like mere imagination, just like the vision of the dinosaurs in the end.

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