Disney did an about-face on its metaverse strategy this week, laying off the high-tech team formed by the previous CEO Bob Chapek just last year. The Mouse House, like so many companies, is readjusting its priorities away from risky bets in extended reality, and focusing more on its core products of video streaming, parks and movies amid a strained economy.
The move makes The Walt Disney Co. the latest major media company to put distance between itself and the metaverse, leaving the advertising world to wonder what’s next, and what went wrong. The retreat is another blow to the early optimism, which some have called marketing hype, that fueled the interest in Web3 the past two years.
“Metaverse,” like “NFT” and “crypto,” has become a sullied word in some circles. The spectacular collapse of crypto exchange FTX exposed the unregulated nature of cryptocurrencies. NFTs, the digital assets powered by crypto payments, have been tainted by frequent scams and questionable utility. And the metaverse, despite all the attention brought to it when Meta changed its name from Facebook in 2021, has never quite taken off. This year, Meta CEO Mark Zuckerberg announced 2023 would be a “year of efficiency,” and the company has had to assure investors that pie-in-the-sky projects would not detract from its main business. Meta has also undergone significant layoffs. And in February, Microsoft cut its metaverse team as part of a round of layoffs.