According to reports, the world’s largest entertainment company, Disney, has abandoned its metaverse division as part of a larger reorganization plan to reduce operational costs by $5.5 billion and eliminate 7,000 jobs over the course of two months.
The Wall Street Journal (WSJ), citing “people familiar with the matter,” broke the news in a piece on March 28.
Eliminate Metaverse Division
It is believed that the metaverse division was established in February 2022 to develop new approaches for Disney fans to interact with its stories.
A “virtual-world simulator” that Disney also patented was intended to provide headset-free augmented reality (AR) attractions at Disney theme parks on December 28, 2021.
- Disney has abandoned its metaverse division to reduce operational costs by $5.5 billion.
- Disney eliminate 7,000 jobs over the course of two months.
- The choice to reduce operating costs and personnel size was made after consulting with McKinsey
The company has thought about incorporating metaverse technology with sports betting in the past, but the notion was never developed.
According to the study, the choice to reduce operating costs and personnel size was made after consulting with McKinsey & Company to identify cost-saving alternatives.
The decision was primarily influenced by unfavorable economic conditions and heightened competition in the streaming market.
Bob Chapek and Robert Iger, the current and past CEOs of Disney, once viewed the metaverse as an extremely positive investment potential.
Iger previously served as a director and adviser for Genies, a platform for virtual avatars that utilizes Dapper Labs’ Flow blockchain, while Chapek has reportedly called the metaverse “the next great storytelling frontier.”
