​WSJ: Disney eliminates the division responsible for the metaverse

What’s new? Disney has eliminated its metaverse development division, cutting about 50 of its employees as part of an overall restructuring plan. The division, headed by former Disney consumer products executive Mike White, was to find ways to deliver interactive stories in new technological formats. White remains with the company for now, but there is no word on his new position. It is expected that about 7000 more people could leave the company over the next two months, The Wall Street Journal reports, citing sources familiar with the situation.

News on the WSJ website

What else is known? Former Disney CEO Bob Chapek hired White in February 2022, telling employees in an internal memo that his job was to create “an entirely new paradigm for how audiences experience and engage with our stories.” Chapek also called the metaverse “the next great storytelling frontier” and said that White, in his new position, will “help connect these in-flight efforts” of the company in this area.

In September, Disney announced that it was seeking a corporate attorney to work on transactions involving new technologies, including non-fungible tokens (NFTs), metaverses, and decentralized finance (DeFi).

In January 2023, the company received a technology patent for the metaverse. With it, the entertainment giant planned to merge the virtual and physical worlds in its theme park. A year after the division’s creation, however, Disney’s strategy for the metaverse remained unclear, although the company hinted that the new technology could find applications in fantasy sports, theme parks, and other types of consumer experiences.

Disney continues to be under pressure from investors who are forced to make cuts in non-core businesses. Last year, the company hired consultants from McKinsey & Co. to look for cost-cutting opportunities. And in February 2023, Disney announced that it intends to cut $5,5 billion in costs and cut about 7000 employees as part of a broader restructuring plan.

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Earlier, Meta CEO Mark Zuckerberg refused to work on and invest in further development of the Horizon Worlds metaverse. The company had invested billions of dollars in the project, but heavy losses had led to disappointment from investors. In 2022 alone, Meta lost $13,7 billion on the project.