Disney Scraps Metaverse Division As Virtual Worlds Become Yesterday’s Tech Fad: Report

Disney has eliminated its entire metaverse division of roughly 50 people, according to a new report from the Wall Street Journal. And while most people are still confused about what the “metaverse” is even supposed to be, Disney has reportedly dropped plans to explore it, as the company begins layoffs of roughly 7,000 people across the entire company.

Disney’s metaverse team was led by Mike White, who will remain at the company, according to the Wall Street Journal. Disney did not immediately respond to a request for comment late Monday.

Disney’s metaverse division, which former CEO Bob Chapek dubbed “next generation storytelling,” was created in February 2022 when media companies were convinced Facebook must be on to something. Facebook CEO Mark Zuckerberg announced a bold new plan to focus on the metaverse in October 2021, even changing his company’s name to Meta to emphasize his commitment to that vision.

But the metaverse has become little more than a punchline to many people in the world of tech—an effort to create a virtual world where the only “innovation” was being able to see your coworkers using goofy avatars. Zuckerberg made a pivot in February, announcing that his company was going to focus on artificial intelligence. And while AI is a catchall term that includes chatbots like ChatGPT and image creators like Midjourney, the broad consensus is that these technologies actually will be revolutionary.

One only needs to look at the Reddit page for Midjourney to see how exciting, and perhaps terrifying, the next few years will be with AI. We’ve already seen people fooled by a fake Pope Francis in a big white puffer coat, an earthquake from 2001 that never happened, and former president Donald Trump getting arrested. Trump even recently shared a fake image of himself praying on Truth Social.

History is littered with predictions about virtual reality worlds that were going to change everything, especially during the VR hype cycle of the 1990s. Technologist and media critic Jaron Lanier promised in 1991 that the virtual worlds just over the horizon would transcend physical space. AT&T also created a concept video in 1993 that imagined how kids of the future would be playing video games in virtual reality. NBC News even ran a segment in 1996 warning that people could be getting sick from the technology.

But that vision of the future never arrived, largely because virtual reality headsets are still huge and expensive. The future is incredibly difficult to predict, and no one knows for certain whether AI will be monetized in exciting new ways. But if you have to make a bet on metaverse versus AI, you should probably stick with the latter. Disney certainly is.