Disney shuts down Metaverse division amidst cost-cutting efforts

https://medium.com/@cryptowithkieron/disney-shuts-down-metaverse-division-amidst-cost-cutting-efforts-1e64adeeef7e

Disney has shut down its metaverse division and lets go of all 50 team members responsible for developing new ways to tell interactive stories using technology.

This restructuring plan is part of Disney’s larger effort to cut costs and will result in the layoff of 7,000 employees over the next two months, with a goal of reducing operating costs by $5.5 billion.

The metaverse team, led by former Disney consumer products executive Mike White, was working to leverage Disney’s vast library of intellectual property to create new experiences.

This move comes after Facebook changed its name to Meta in late 2021 and began to focus more heavily on augmented and virtual reality technologies, with Disney entering the metaverse just a few months later in early 2022.

Chapek referred to the metaverse as “the next great storytelling frontier” and shared with employees via an internal memo that the goal was to “create an entirely new paradigm for how audiences experience and engage with our stories.”

Even though more than a year has passed since the creation of the division, it’s still unclear exactly what kind of experiences the team was working on. The Wall Street Journal reported that the possibilities could have included “fantasy sports, theme-park attractions, and other consumer experiences.”

Last September, rumours circulated that Disney was interested in hiring a transaction lawyer to explore emerging technology opportunities, specifically mentioning NFTs, blockchain, the metaverse, and DeFi. It seems like Disney was seriously considering all sorts of possibilities for the future of storytelling and entertainment.

Disney is not the only tech giant making a pivot away from the metaverse.

Meta, the metaverse arm of Facebook, and other companies that had previously doubled down on the metaverse are now reconsidering their approach.

It seems that the success of AI-powered chatbots like ChatGPT has convinced many tech companies to shift their focus towards this emerging technology instead.

In fact, Meta, which made waves with its high-profile entry into the metaverse in 2021, is now pivoting towards a “new top-level product group at Meta focused on generative AI to turbocharge our work in this area,” according to CEO Mark Zuckerberg’s February announcement.

It’s interesting to see how quickly the tech industry can shift its focus and priorities based on emerging trends and technologies.

Microsoft discontinued its Industrial Metaverse Core team, a project that was just four months old and aimed to encourage the use of the metaverse in industrial settings. Unfortunately, this move resulted in the layoff of all 100 employees working on the project.

It seems like tech companies are becoming increasingly disillusioned with the metaverse, as slow growth and waning user interest in new entertainment formats have left many feeling frustrated. Even major metaverse platforms like Decentraland and The Sandbox have seen a sharp decline in virtual land sales.

According to data from a Dune Analytics dashboard, Decentraland, which has a market cap of over $1 billion, only registered $170,000 worth of LAND sales in February, compared to its all-time high of $7.7 million in January 2022. It’s clear that the hype around the metaverse has died down significantly, and companies are starting to rethink their investments in this space.