Disney Reportedly Shuts down Metaverse Division

Entertainment giant Disney reportedly decided to abandon its metaverse division as a part of its wider restructuring plan to cut its operating expenses by $5.5 billion and lay off 7,000 employees within the coming two months.

The news was circulated by the Wall Street Journal, which quoted people familiar with the matter as saying, who pointed out that the employment contracts of the metaverse division’s 50 employees will not be renewed, except for Michael White, who led the broader consumer-products unit, according to Forbes.

In February 2022, Disney created its metaverse division in an attempt to look for new ways to attract the attention of the next generations of audience and cope with the tech companies’ trend to the metaverse like Meta.

According to the Wall Street Journal, Disney’s decision to close the metaverse division and cut operating expenses came after a consultation with McKinsey & Co to find cost-cutting opportunities. The two main reasons for Disney’s move are the growing competition in the streaming sector and the discouraging economic conditions.

Earlier, Disney’s former and current chief executives, Bob Chapek and Robert Iger, believed that they were looking at the metaverse as a very bullish investment opportunity. Chapek described the metaverse as the next great storytelling frontier as he was so optimistic about the company’s future in the virtual space.

A metaverse is a network of three-dimensional virtual environments focusing on social interaction. It may be characterized as a digitally simulated world. It utilizes blockchain, augmented reality, and virtual reality (VR), combined with social media principles, to develop venues for extensive user communication that imitate the real world.