Disney, the world’s leading entertainment company, recently announced the elimination of its newly created metaverse division and a round of layoffs in its corporate structure as part of its wider re-organization.
The metaverse division had been created eighteen months ago with the goal of exploring the possibilities of using augmented, virtual, and mixed reality technology to create compelling new entertainment experiences for Disney’s customers. This was part of the company’s attempts to stay at the forefront of entertainment technology, and create an innovative streaming offering that would, it hoped, grow the company’s presence in a field where competition from the likes of Netflix, Amazon, and Apple is growing ever fiercer.
But it now appears that the company’s efforts to explore the metaverse have led to the downsizing of its efforts, with the entire division apparently being eliminated in the first round of layoffs. Disney has not yet commented on the specifics, but it has stated that the layoffs will impact a small number of employees involved in the metaverse division and in other parts of the company.
The move raises questions about whether the company believes the future of entertainment will be dominated by companies that invest heavily in the metaverse, and whether the company’s management is wary of the risks involved. After all, the metaverse, augmented, virtual and mixed reality technology is still relatively new, and large-scale investments in it might lock Disney into an outdated platform should a better one come along.
Despite this apparent setback, some associates of the metaverse division have suggested that the shutdown of the division doesn’t necessarily mean that Disney has given up on investing in the technology. They suggest that the division’s employees, the majority of whom have kept their jobs, could still be put to work creating experiences in the metaverse, albeit in different parts of the company where they are less visible.
In any case, Disney’s move is sure to be closely watched by the tech industry, as it could set a precedent for how many large enterprises approach the potential of the metaverse. The real story, though, may only become clear over time, as more companies take the plunge into exploring the potential of the metaverse, and either reap the rewards or succumb to the risks.
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