Disney is reportedly shuttering its metaverse business as part of a larger round of layoffs.
The entertainment behemoth has shut down its division that was working on metaverse strategies as part of a plan that could shrink Disney’s headcount by about 7,000, The Wall Street Journal reported Tuesday (March 28).
The 50-person division, overseen by former Disney consumer products executive Mike White, was responsible for coming up with ways to tell interactive stories across new formats, but using Disney’s deep bench of intellectual properties, the report said, citing unnamed sources.
At the same time, Iger also made it clear that Disney’s chief focus was restoring profitability, a goal that will require $5.5 billion in cost cutting.
Disney first revealed its metaverse ambitions last year, with former CEO Bob Chapek saying he was “blown away” by company teams’ experiments with the metaverse and virtual reality, which he described as “the next great storytelling frontier.”
Also excited by the metaverse is Meta CEO Mark Zuckerberg, who expects a billion people to live in the virtual space by 2030.
As PYMNTS’ Karen Webster wrote earlier this week, Meta has reportedly lost six times more money than it made from the metaverse as it tried to entice users. And despite a shrinking market cap, Zuckerberg remains undaunted, saying his company will invest 20% of its revenues in the metaverse each year going forward.
“There’s only one problem,” wrote Webster. “Most people — as in mostly all of them — don’t want to give up the physical world to live mainly via avatars in a virtual one,” even if they want to use technology to improve their interactions in the physical world.
In a separate interview with PYMNTS this week, Worldline metaverse head Sascha Münger — whose company is soon to open a virtual shopping mall — said that for the metaverse to truly take off, technological development would need to speed up.
“When you buy a hoodie for your virtual avatar, you want to use it in different worlds and not just in one world,” Münger said. “And this is where NFT technology based on blockchain can help because as the owner, you could connect your wallets to all those different worlds.”