Popular family entertainment giant Disney is redirecting its efforts away from Web3 as part of a restructuring plan. The plan includes shutting down its metaverse unit as well as slashing operational costs by $5.5 billion! 

The decision came after consulting with McKinsey & Company. The media company approached McKinsey & Co. for help because of the unfavorable market conditions and increased competition in streaming services.

Following the consultation, it decided to change direction, cut expenses, and reduce headcount. 

Wall Street Journal (WSJ) stated that all the department’s team members (about 50) will be let go except Mark White. Mark was the division head and also led the consumer products unit.  Although, it’s still not clear what his next role in the company will be.

In addition to this first round of layoffs, Disney is also retrenching 7,000 staff over the next two months. Those affected are mostly in its retail, cruise line, and theme park divisions.

Disney had big plans for metaverse last year.

On December 28, 2021, Disney patented a “virtual-world simulator” to deliver high-tech augmented reality (AR) for its Disney theme parks. It also talked about blending metaverse with sports betting, but that’s as far as the idea got.

Under Bob Chapek’s leadership, it created the metaverse division naming Mark White the SVP of Next Generation Storytelling and Consumer Experiences. After that, it created NFTs in September 2022 and indicated an interest in hiring an attorney experienced with “emerging technologies, NFTs, and decentralized finance’’. 

Moving forward, Disney is unsure of its place in the Web3 world and has been silent on its future plans in that regard. Its priority at the moment is the newly established business – Media and Entertainment Distribution. The Media and Entertainment Distribution will oversee its streaming services, including ESPN+, Disney+, and Hulu. 

While we hate to see them pull the plug on the metaverse project, this is part of a bigger strategy. It will help the brand focus on its content which is why families love them in the first place.