• Disney shuts down its metaverse division, eliminating 7,000 jobs
• The decision comes as a result of a cost-cutting initiative and unfavorable economic conditions
• The move reflects a broader shift in the industry from the metaverse to other areas such as NFTs, DeFi, and Web3.
Disney Shuts Down Metaverse Division
Disney has reportedly shuttered its entire metaverse division in an effort to streamline its business and reduce costs. As part of the move, 50 team members responsible for the ambitious virtual reality project have been laid off, along with thousands of other employees affected by the large-scale job cuts.
Cost Cutting Initiative
The decision to cut costs was made after consulting with McKinsey & Company to identify areas where savings could be made. Although Bob Chapek and Robert Iger had previously expressed enthusiasm about the potential of the metaverse, unfavorable economic conditions and fierce competition in the streaming sector ultimately led to this outcome.
Metaverse Strategy Development
Disney had begun developing its own strategy for entering into the space back in mid-2022, posting a job opening that same year for an in-house attorney specializing in NFTs and DeFi. Despite these efforts however, it appears that Disney has now decided to exit from this market entirely.
Industry Shift Away From Metaverse
The news marks a significant shift away from traditional tech giants’ bullishness about the potential of virtual worlds. While venture capital still flows into startups focused on building out these digital spaces, many are now placing their attention on alternative technologies such as NFTs, DeFi, and Web3 instead.
Ultimately, Disney’s decision to abandon its metaverse strategy is indicative of an overall trend away from investing heavily in this space due to uncertain returns on investment and high development costs associated with creating digital worlds.