Metaverse News

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.

Animoca Brands, a prominent Web3 investor and blockchain game developer, recently dismissed rumors about its intention to cut the money allocated to its metaverse fund by 20%, according to Cointelegraph.

A report published by Reuters, citing people familiar with the matter, claimed that Animoca Brands scaled back its metaverse fund target by 20% to $800 instead of $2 billion due to the fluctuations in the crypto market and instability in the banking sector.

In a statement, Animoca noted: “The claim that the Animoca Capital fund target was ‘cut’ from $2 billion to $1 billion is not correct, because $1 billion has always been within the range declared.”

The NFT and gaming investor also denied that the metaverse fund’s valuation has dropped from $6 billion in July 2022 to roughly $2 billion in March 2023.

Earlier in November, Animoca’s Co-founder and Executive Chairman Yat Siu announced his company’s plans to set up a fund worth $2 billion to invest in metaverse-related activities as the target size would be between $1 billion and $2 billion depending on how much was raised.

The firm has already admitted that the instability in the banking scene in the United States has a negative impact on the available venture capital, however, it stressed that the final amount of its metaverse fund had been determined without changes, adding it will inform the public about “with the appropriate details, including the final size of this fund.”

Commenting on the rumors which were given by unnamed sources, Siu told Cointelegraph “this makes it difficult to ascertain exactly who or what the sources and agenda are, which is unfortunate.”

Earlier in March, Saudi leading games production company Manga Productions inked a memorandum of understanding (MoU) with Animoca Brands to build a strategic partnership through which they can develop Web3 initiatives and enhance the blockchain industry in the region. The partnership will showcase Mango’s content and characters in the Web3 ecosystem and develop Web3 pilot projects across Animoca’s extensive ecosystem to utilize Manga Productions’ high-quality content portfolio.