cryptonews.com
Disney has pulled the plug on its metaverse division, eliminating the entire team of 50 people tasked with exploring ways to tell interactive stories in new technological formats.
According to a Monday report by the Wall Street Journal, the layoff is part of a broader restructuring plan that will see Disney dismiss 7,000 staff over the next two months in a bid to reduce operating costs by $5.5 billion.
The metaverse division was tasked with finding ways to tell interactive stories in new technological formats using Disney’s extensive library of intellectual property. It was headed by Mike White, a former Disney consumer products executive, who reportedly remains at the company.
Disney first entered into the metaverse in early 2022, approximately four months after Facebook’s bold move to change its corporate name to Meta to reflect the company’s new focus on AR and VR technologies.
At the time, Disney’s former chief executive, Bob Chapek, described the metaverse as “the next great storytelling frontier.” In an internal memo, he told employees that the goal was to “create an entirely new paradigm for how audiences experience and engage with our stories.”
It is worth noting that it is still largely unclear what experiences the team was working on despite the fact that more than a year has passed since the division was created. The WSJ report claimed they could have involved “fantasy sports, theme-park attractions, and other consumer experiences.”
In September last year, reports claimed that Disney was looking to hire a transaction lawyer to explore emerging technology opportunities, including NFTs, blockchain, metaverse, and DeFi.
Meta and Other Tech Companies Pivot Toward AI, Leaving Metaverse
Aside from Disney, several other tech giants that doubled down on the metaverse last year amid the frenzy are reconsidering their approach.
Specifically, the recent success of AI-powered chatbots like ChatGPT has led many tech companies to pivot toward this emerging technology.
For instance, Meta, which made headlines with its high-level metaverse entrance back in 2021, is pivoting to a “new top-level product group at Meta focused on generative AI to turbocharge our work in this area,” CEO Mark Zuckerberg wrote in a February 27 Facebook post. He added:
“In the short term, we’ll focus on building creative and expressive tools. Over the longer term, we’ll focus on developing AI personas that can help people in a variety of ways.”
The shift comes after Meta lost billions of dollars last year on the metaverse.
Moreover, Microsoft has discontinued its Industrial Metaverse Core team this year, a four-month-old project aimed to encourage the use of the metaverse in industrial environments. The tech giant also laid off all employees working on the project, which amounts to about 100 people.
The move by tech companies to dismiss their metaverse ambitions comes as slow growth in the popularity of the metaverse has frustrated those who bet big on new entertainment formats.
Notably, major metaverse platforms like Decentraland and The Sandbox have also seen a sharp decline in the number of virtual land sales amid waning user interest.
According to a Dune Analytics dashboard, Decentraland, with a market cap of over $1 billion, registered only $170,000 worth of LAND sales in February, compared to its all-time high of $7.7 million in January 2022.