Entertainment giant Disney has reportedly scraped its metaverse division as part of a bigger restructuring strategy to reduce its operational expenses by $5.55 billion and lay off 7,000 employees over the course of two months.
The Wall Street Journal (WSJ) published the news on Disney’s metaverse on March 28, citing “people familiar with the issue.”
The WSJ said that all 50 or so members of the metaverse division will be left without a new employment contract, with the exception of Michael White, who led the larger consumer products unit.
It is said that the metaverse division was established in February 2022 in order to offer new methods for Disney viewers to interact with its stories.
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 once investigated incorporating metaverse technology with sports betting, but the concept was never pursued.
According to the study, the decision to reduce operating expenses and headcount followed a consultation with McKinsey & Company to identify cost-cutting alternatives.
The decision was primarily influenced by unfavorable economic conditions and rising streaming industry competition.
Bob Chapek and Robert Iger, the former and current chief executive officers of Disney, once viewed the metaverse as an extremely positive investment potential.
Chapek reportedly referred to the metaverse as “the next big frontier for storytelling,” while Iger previously served as a director and advisor for Genies, a digital avatar platform that ran on Dapper Labs’ Flow blockchain.
