Disney dissolves its metaverse department amid restructuring, laying off employees, and discontinuing membership initiatives.
Disney recently dissolved its metaverse-focused department, which concentrated on creating next-generation storytelling and immersive experiences for consumers. According to a report by WSJ, the entertainment giant has let go of around 50 employees from this team as part of a larger reorganization strategy. This strategy aims to decrease the total number of jobs across the company by nearly 7,000 over the coming two months. The metaverse team was led by Mike White, an ex-Disney consumer products executive, who was responsible for exploring novel, interactive storytelling techniques utilizing Disney’s extensive intellectual property.
Mike White continues to be part of Disney. But, his new position remains undefined. White was initially recruited by former CEO Bob Chapek in February 2022. Chapek, who was succeeded by Robert Iger in November, previously described the metaverse as “the next significant storytelling frontier.” Even though the company initially displayed enthusiasm, the specifics of Disney’s metaverse strategy remained unclear a year after the department’s inception. Some of the potential applications included fantasy sports, theme park attractions, and other unique consumer experiences.
Disney Metaverse and Membership Programs Discontinued; Shares Decline
White was also instrumental in developing a subscription program akin to Amazon Prime, which aimed to integrate customer data across multiple Disney platforms such as Disney+, online retail operations, and smartphone applications utilized by visitors at Disney theme parks. However, according to sources close to the matter, this initiative also stopped.
Disney’s stock value experienced a 0.3% dip to $95.34 during Tuesday morning’s trading session. Despite this downturn, the stock has witnessed an overall 10% growth in 2023. Interestingly, Disney’s current CEO, Robert Iger, maintains a positive outlook regarding the metaverse’s potential. In 2022, Iger invested in and secured a position on the board of Genies Inc. The latter is a technology startup that offers tools for users to create elaborate online avatars for use within the metaverse.
Nonetheless, Disney faces mounting pressure from investors to eliminate non-core businesses. In response to this demand, the company enlisted consultants from McKinsey & Co. to pinpoint cost-saving opportunities last year. This decision reportedly angered several high-ranking content executives. In February, Disney declared its intention to slash $5.5 billion in expenses and remove approximately 7,000 jobs as part of a broader restructuring plan. The corporation, like many other prominent media companies, is confronting economic difficulties, fierce competition in the streaming sector, and shrinking revenue from cable TV and the film box office.
The slow adoption of the metaverse has exasperated other tech companies as well. Meta Platforms Inc., the parent organization of Facebook and Instagram, allocated billions of dollars to metaverse ventures. However, it faced low demand and widespread confusion among users about the technology’s implementation. A Meta representative stated that the company’s metaverse initiatives were always envisioned as a long-term project. The spokesperson also conveyed confidence in the metaverse’s future, considering it to be the next era of computing.