No more meta Mouse House… Entertainment all-star Disney reportedly laid off the 50-person team leading its dive into the metaverse. Formed last year, the group was partly responsible for what then-CEO Bob Chapek called the "next great storytelling frontier" (picture: immersive fantasy sports, digital theme-park rides, meta-movies). The cuts are only a sliver of 7K planned layoffs as Disney slashes costs and tries to make its streaming biz profitable.
Meta-messy… Disney is just the latest company to see its lofty metaverse goals get squeezed under the IRL weight of rising interest rates and a corresponding shift from #growth-mode to #profit-first. Microsoft is said to have dissolved its 100-person, manufacturing-focused metaverse team after four months in operation. And last month Tencent reportedly dropped its metaverse-adjacent hardware and software VR effort. And then there's Meta:
Reality bites: Reality Labs, the business unit responsible for Meta's metaverse ambitions, lost nearly $14B last year.
Faceplant: After quarterly profit plunged, CEO Mark Zuckerberg introduced the company's "year of efficiency" — which could translate to a meta-vestment pullback.
New buzzword: This month Zuck wrote that AI, not the metaverse, is now Meta’s "single largest investment." Last month Meta released its large language model (LLaMa).
Big bets don't have to be all or nothing… as Disney's mouse-sized metaverse move makes clear. Shifting macro conditions have sent media and tech titans scrambling away from their metaverse bets. Companies like Disney were smart not to overhaul their entire biz. But the trend doesn't mean the metaverse is dead on arrival. Roblox's no-headset-required take on the metaverse is booming, but remains a far cry from the "next chapter of the internet" hyped by Zuck. Still, it could eventually be enough to turn a profit.