Walt Disney Co (NYSE:DIS)
Disney has long been recognized as a firm that specializes in producing magical experiences for audiences of varying ages. Disney has created a reputation for creating worlds that people may escape to via the use of its animated films as well as their theme parks. In recent years, Disney has been investigating a notion known as the metaverse, which refers to a type of virtual world in which users are able to communicate with one another in real-time. But, in an unexpected turn of events, Disney has revealed that it would no longer pursue the development of a metaverse. As a result of this decision, a lot of people are questioning where they went wrong and what the implications are for Disney’s future.
The Walt Disney Company is discontinuing its involvement in the metaverse. It’s another example of a corporation dialing back its goals for the much-touted technology in response to investor pressure to show evidence of more stringent cost control.
The next-generation storytelling and consumer experiences unit of Disney (NYSE:DIS) is reportedly getting go of almost all of its staff, including approximately fifty workers, according to The Wall Street Journal, which cites persons familiar with the subject as a source. The purpose of that particular section was to investigate the potential for interactive storytelling afforded by the metaverse’s online environment.
Barron’s contacted Disney on Tuesday morning for a statement about the layoffs, but Disney did not immediately react to the request. During the premarket hours, most stock prices remained relatively unchanged.
It is a telling reversal on prospects for the metaverse, which former Disney CEO Bob Chapek hailed as the “next great storytelling frontier” only one year ago. Although the job cuts are only a fraction of the 7,000 jobs that the company intends to start eliminating this week, the company intends to start eliminating jobs this week.
Executives no longer make statements of this nature because, in today’s markets, the emphasis is placed more on showing signs of efficiency than grand ambitions.
While it continues to lose billions of dollars on the technology, even the company that owns Facebook, Meta Platforms (NASDAQ:META), has made layoffs in its Reality Labs business, which is responsible for the company’s hardware and metaverse division.
That in no way indicates that the metaverse has come to an end. In a survey that was released not too long ago, the analysts at S&P Global Market Intelligence anticipated that the technology will earn more than $52 billion in yearly revenue by the year 2027.
On the other hand, this indicates that the number of companies that are able to persuade investors that they should be investing in the metaverse is going to become more limited. According to the projections of S&P Global, revenue from video games will account for 41% of the total yearly revenue from the metaverse. Other significant categories include hardware, commercial software and services, e-commerce, and advertising.
It appears that Disney characters like Mickey Mouse, Luke Skywalker, and Iron Man will, at least for the time being, continue to exist within their respective canonical fictional universes.
Many individuals have been taken aback and left feeling disheartened as a result of Disney’s decision to abandon its plans for a metaverse. It would appear that Disney was unable to overcome the financial and technological hurdles that come with the creation of a virtual world. Despite the fact that the metaverse has gained popularity in recent years, this seems to be the case. It is essential to keep in mind, however, that Disney is a business that is consistently undergoing change.
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