It had been hoped that Disney's rich library of intellectual property could be used to reinvigorate classic stories and allow consumers to enjoy them in new ways.
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Disney is abandoning its ambitions for the metaverse as the entertainment giant prepares to slash 7,000 jobs in the next two months.
According to The Wall Street Journal, a small team had been working on strategies related to virtual worlds in an attempt to deliver next-generation storytelling and consumer experiences.
It had been hoped that Disney's rich library of intellectual property could be used to reinvigorate classic stories and allow consumers to enjoy them in new ways.
The newspaper's report suggests about 50 people are leaving the company — but Mike White, the executive who was leading the division, is expected to be redeployed.
Bob Iger — who recently returned as Disney's CEO — has spoken publicly about how he's bullish on the metaverse, describing it as "the next great storytelling frontier."
Shortly before he rejoined the business, he had invested in a Web3 metaverse avatar company called Genies — and joined its board.
The Challenges Facing Disney
Last month, Disney had revealed that it was attempting to cut $5.5 billion of costs.
The metaverse team are involved in the first wave of job cuts — with a second, larger round of redundancies set to be confirmed next month.
Despite optimism about the future potential of the metaverse — JPMorgan has described it as a $1 trillion opportunity — developing virtual worlds is an expensive endeavor.
Meta has been pouring tens of billions of dollars into its own platform, Horizon Worlds, despite a growing backlash from investors.
The social network — which owns Facebook and Instagram — changed its name to match its ambition.
But it's admitted that this research and development might take years to yield a profit.
Horizon Worlds has also suffered nasty setbacks, with reports suggesting that the platform was placed on "quality lockdown" — and even its own developers weren't using it.
Even if the technology proves to be flawless (and the graphics have been pretty janky in many metaverses so far) a more pressing concern is ensuring that quality content is provided.
While there have been some successes — a number of internationally renowned pop stars have already performed virtual gigs — the big challenge is offering an experience that will keep users coming back for more.
As Disney takes a step back, it's highly likely that the entertainment giant will wait for another company to develop the technology — and maybe then offer its content afterwards.
Another challenge relates to how expensive virtual reality headsets currently are — and it may take years before costs come down. Making this equipment more affordable for everyday users is going to be a vital milestone in unlocking mass adoption.
As the old crypto saying goes, we're very early.
