Disney Exits Metaverse Division, Cuts Costs Amid Economic Pressures

Disney has shut down its Metaverse Division, part of a move to reduce $5.5 billion in operating costs and lay off 7,000 employees. Approximately 50 staff members from the division will be let go, with no new employment contracts except for Michael White, who led the broader consumer products unit. The division aimed to discover new ways for Disney audiences to engage with its content. Disney had also filed a patent for a "virtual-world simulator" to facilitate headset-free augmented reality (AR) attractions at its theme parks.

The company also explored integrating metaverse technology into sports betting but made little progress. After consulting with McKinsey & Company to find cost-cutting opportunities, Disney decided to reduce staffing and operating expenses due to unfavorable economic conditions and increased competition in the streaming sector.

Both former and current Disney CEOs, Bob Chapek and Robert Iger, had previously viewed the Metaverse as a promising investment, with Chapek calling it "the next great storytelling frontier."