Disney apparently eliminates metaverse division

According to reports, the entertainment giant Disney has terminated its metaverse business as part of a bigger restructuring strategy to reduce its operational expenditures by $5.55 billion and lay off 7,000 employees over the next two months.

The Wall Street Journal (WSJ) published the news on March 28, citing “people familiar with the issue.”

The WSJ said that all 50 or so personnel of the metaverse division would be left without a new employment contract, except Michael White, who oversaw the larger consumer goods section.

It is said that the metaverse division was established in February 2022 to offer new methods for Disney viewers to interact with its tales.

On December 28, 2021, Disney also patented a “virtual-world simulator” to permit headset-free augmented reality (AR) attractions at Disney theme parks.

The company previously investigated using metaverse technology with sports betting, but the concept was never pursued.

According to the results of the study, the decision to cut operational expenditures as well as people occurred after a meeting with McKinsey & Company in which various ways of decreasing costs were explored. This meeting also led to the decision to reduce the number of employees.

The unfavorable state of the economy, in addition to the intense rivalry in the streaming industry, was the key driving force behind the decision.

Both Bob Chapek, the current chief executive officer of Disney, and Robert Iger, who served in that role before and is now a member of Disney’s board of directors, thought that the metaverse offered a fantastic chance to make a return on financial investments in the past.

Iger formerly held positions as director and advisor for Genies, a digital avatar platform that ran on Dapper Labs’ Flow blockchain. In those capacities, he oversaw business operations and provided strategic counsel.

It is reported that Chapek described the metaverse as “the next big frontier for narrative,” while it is also said that Chapek expressed similar sentiments.