Disney has reportedly abandoned its metaverse division as part of its restructuring strategy that aims to cut operating expenses by $5.5 billion and lay off 7,000 employees in two months. According to the Wall Street Journal (WSJ), which cited “people familiar with the matter” in a post on March 28, all 50 or so members of the metaverse division will not be offered new employment contracts, with the exception of Michael White, who led the broader consumer-products unit.
Disney’s decision to shutter the metaverse division is surprising since it is a hot topic in the entertainment industry. The company had even patented a “virtual-world simulator” that aimed to enable headset-free augmented reality (AR) experiences at its theme parks on December 28, 2021. The company had also previously explored the integration of metaverse technology into sports betting, although nothing came of it.
While there has been no official statement from Disney regarding its decision, the company’s cost-cutting initiative is part of a broader restructuring plan designed to position the firm for long-term growth. Disney has been heavily impacted by the COVID-19 pandemic, and the resulting closures and capacity limits have taken a toll on its theme parks and movie theaters.
Despite the metaverse division’s demise, Disney still plans to leverage technology to enhance its offerings. The company has continued to invest in its streaming services and has launched Disney+, which has become a major competitor to Netflix. Furthermore, the company has partnered with technology firms such as Amazon to develop innovative new products like its Disney MagicBand, which allows visitors to interact with theme park attractions and make purchases.