Walt Disney Co. has reportedly ditched its metaverse division as part of a broader restructuring process that will cut the company’s operating expenses by $5.5 billion and lay off 7,000 employees over the next two months.

Citing people familiar with the matter, the Wall Street Journal reported today that would include the 50 or so members of the company’s team, except for team lead Mike White.

The division was initially formed in early 2022 with the expectation that it would take the company’s intellectual property and take it into the realm of new immersive technologies that had been increasingly popularized by a concerted push by Mark Zuckerberg, chief executive of Meta Platforms Inc. White was tapped to lead the effort at the time by former Disney CEO Bob Chapek.

At the time Chapek called the metaverse the “the next great storytelling frontier” and said he was “blown away by what I’ve seen.”

Loosely described, the metaverse refers to interconnected virtual worlds where people will be able to come together to work, play and entertain themselves. For an entertainment company such as Disney, an upcoming technology such as the metaverse, however nebulously described, seems like it would be a choice opportunity. 

However, the company’s plans on how to engage with the metaverse remained murky and did not materialize within a span of a year. The company did hint at using it as part of consumer experiences, theme-park attractions and other entertainment interactions.

The move comes at a time when the company is looking to trim down and it may seem that metaverse plans are not producing the needed attention or revenue that they could have. Elsewhere in the industry, Meta is pouring billions into its metaverse division but hasn’t gotten much attention for it.

The loss of the division doesn’t mean that the company has entirely abandoned plans to look into metaverse. Disney does in fact explore a lot of virtual reality experiences, although few of them are social.

The company’s current CEO, Bob Iger, who replaced Chapek in November, still appears optimistic on metaverse technologies. He invested in and joined the board of Genies Inc., an animated metaverse avatar startup company.

Image: Pixabay