Disney’s foray into the metaverse has come to an abrupt end as the entertainment giant has reportedly shuttered its entire metaverse division.
In a bid to streamline its business and curb costs, the company is slashing 7,000 jobs, including the 50-strong team responsible for the ambitious virtual reality project, as revealed by sources familiar with the matter in a Wall Street Journal report.
Despite the cuts, the team’s leader, Mike White, is said to be staying on board at Disney.
Disney Undergoes Major Cost-Cutting Measures
Sources cited in a recent report suggest that Disney made the decision to slash costs and staff numbers after consulting with McKinsey & Company to identify areas for cost-cutting.
The move comes as a surprise given that both Bob Chapek and Robert Iger, Disney’s current and former CEOs, had previously expressed bullishness about the potential of the metaverse.
However, unfavorable economic conditions and stiff competition in the streaming sector were reportedly key drivers behind the decision.
Disney began developing its metaverse strategy in mid-2022 and intensified its efforts in September of that year by posting a job opening for an in-house legal expert specializing in NFTs and DeFi.
A Shift In Outlook
The metaverse was once the darling of the tech world, hailed as the next big thing after the internet. Tech giants like Facebook, Microsoft, and Roblox invested heavily in the space, and venture capital poured into startups focused on building virtual worlds.
Disney’s move to abandon its metaverse strategy and slash its metaverse team is a reflection of a broader shift in the industry. Many companies are now prioritizing other areas, such as NFTs, DeFi, and Web3.
This shift away from the metaverse can be attributed to a number of factors. For one, the metaverse remains a relatively untested and risky investment. Building a virtual world is a complex and costly endeavor, and it’s not clear yet whether there will be a large enough audience willing to spend time and money in these digital spaces.
Moreover, the metaverse is facing increasing competition from other areas of the crypto and tech landscape. NFTs, for example, have exploded in popularity over the past year, with sales reaching billions of dollars. DeFi, meanwhile, has emerged as a powerful force in the world of finance, offering decentralized and often more accessible alternatives to traditional financial products.
As a result, companies like Disney are shifting their focus away from the metaverse and towards other areas with more immediate potential for growth and revenue.
While the dream of a fully-realized metaverse may still be alive, for now, it seems to have taken a back seat to other priorities.
–Image Credit: Andrey Suslov/Getty
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