Disney becomes the latest metaverse casualty, scraps its next-generation storytelling unit

Get all the important market news and expert opinions in one place with our daily newsletter. Get a comprehensive roundup of the day’s top stories straight to your inbox. Login here!

(Kitco News) – The Metaverse continues to claim corporate sacrifices as Disney has become the latest globally recognized brand to shut down its Metaverse division to cut costs during a tough economy.

The Wall Street Journal was first to report on the development, citing “people familiar with the matter,” indicating that Disney is expanding its next-generation storytelling and consumer experiences unit, a 50-strong team that developed the company’s Metaverse strategy.

The move comes as the mass media and entertainment conglomerate plans to cut operating expenses by $5.5 billion and lay off 7,000 employees over the next two months.

Michael White, a former Disney consumer products executive, was in charge of the department and tasked with finding ways to tell interactive stories in new technological formats using Disney’s vast library of intellectual property, sources said. While White will remain with Disney in an unspecified role, the other members of the Metaverse entity have lost their jobs.

The Metaverse entity was originally formed in February 2022 when White was hired by Bob Chapek, former Disney CEO, who circulated an internal memo saying the goal was “to create a whole new paradigm for it.” , how the audience experiences our stories and engages with them”. Chapek referred to the metaverse as “the next great frontier of storytelling”.

But the crypto industry’s struggles for the remainder of 2022 left those plans in flux, and after more than a year of little development, Disney has decided to close the entity.

It’s highly likely that the entertainment giant will eventually return to the metaverse, since back in December the company patented a “virtual world simulator” aimed at bringing headset-less augmented reality (AR) attractions to Disney theme parks enable from 2021.

Current Disney CEO Robert Iger has also shown he is optimistic about the metaverse by investing in and joining the board of directors Genies Inc., a tech startup that sells tools that allow users to create sophisticated online avatars for use in the metaverse.

The move to shut down the Metaverse unit at this point was influenced by the economic struggles affecting businesses across all sectors. Last year, Disney hired consultants from McKinsey & Co. to help identify cost-cutting opportunities, leading to an announcement in February that the company would make $5.5 billion in savings as part of a broader restructuring plan. dollars and plans to cut about 7,000 jobs.

---

---

Disney isn’t the only company disbanding its Metaverse team, as Meta Platforms Inc., the parent company of Facebook and Instagram, also shut down its Metaverse unit as part of its effort to reduce its headcount by 11,000 employees as a cost-cutting measure. All areas of the company will be affected by the layoffs, including Reality Labs, the unit responsible for developing augmented reality (AR), virtual reality (VR) and prototyping in emerging technologies like mixed reality and brain-computer interfaces .

In February, Microsoft announced it was dissolving its Industrial Metaverse Core Team, a 100-person unit formed in October to help customers use the Metaverse in an industrial environment.

Tencent, the tech company behind social media platform WeChat and China’s largest company by market cap, also announced in February that it had reassessed its approach to the metaverse and scrapped its plans to launch virtual reality hardware after establishing its ” Extended Reality XR unit to be launched last June.

Layoffs have also become common outside of crypto and the metaverse, as e-retail giant Amazon has started to slash its headcount by 18,000, while Google’s parent Alphabet recently laid off 12,000 employees, accounting for 12% of its workforce.