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Another Metaverse Withdrawal: Disneyland Terminates Metaverse Project

another metaverse withdrawal disneyland terminates metaverse project 2

Disney has closed its “Metaverse” division and laid off its entire team of 50 employees who were tasked with exploring new ways to tell interactive stories using emerging technologies. The move is part of a broader restructuring plan by Disney, which aims to cut operating costs by $5.5 billion. As part of this plan, Disney will lay off a total of 7,000 employees over the next two months. The decision to shut down the Metaverse department was a surprise as the company had been exploring new immersive storytelling formats, including virtual and augmented reality, to engage audiences.

Disney Had High Hopes for the Metaverse

The Metaverse division was focused on finding innovative ways to tell interactive stories using emerging technologies while leveraging Disney’s extensive intellectual property library. However, as part of a larger restructuring plan aimed at cutting operating costs by $5.5 billion, Disney has shut down the Metaverse department and planned to lay off the entire team of 50 employees. The move is surprising given Disney’s recent foray into the metaverse space, which began in early 2022.

While it’s uncertain what exactly the Metaverse division was working on, it’s possible that the team was exploring various opportunities related to emerging technologies, including NFTs, blockchain, and DeFi. Reports from September 2021 suggested that Disney was looking to hire a transaction lawyer to explore these areas of interest. Additionally, according to the Wall Street Journal, the division’s work could have involved areas such as fantasy sports, theme park attractions, and other consumer experiences.

another metaverse withdrawal disneyland terminates metaverse project

Disney Is not the Only Company with Doubts About the Metaverse

Other tech giants seem to be rethinking their approach to the metaverse. In addition to Disney’s recent shutdown of its metaverse division, Meta (formerly Facebook) has also significantly shifted its focus on the metaverse. This shift in focus for Meta towards generative AI came after the company incurred massive losses in the metaverse sector in the previous year.

Earlier this year, Microsoft terminated its Industrial Metaverse Core team, a project aimed at promoting the use of the metaverse in industrial settings, just four months after its launch. The company also laid off around 100 employees working on the project. Similarly, Disney’s decision to shut down its metaverse division and lay off its team aligns with other tech giants who have abandoned their metaverse ambitions.

The popularity of major metaverse platforms like Decentraland and The Sandbox has also declined, leading to a significant drop in virtual land sales. In February, Decentraland, which has a market capitalization exceeding $1 billion, recorded only $170,000 in sales, a sharp decline from the all-time high of $7.7 million in January 2022. This decline in user interest is worrying investors who have invested in new entertainment formats, contributing to the decision by major tech companies to abandon their metaverse initiatives.

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