Disney (NYSE: DIS) Kills Metaverse Division As Sector Sees Firms Fleeing

Key Takeaways:

1. Walt Disney announced it was axing its entire Metaverse team as part of its downsizing.
2. Disney share prices form a bullish pattern.

NEW DELHI (CoinChapter.com) — Walt Disney Co. (NYSE: DIS) quietly shelved its plans of becoming a Metaverse giant. The demise of Disney’s Metaverse division came from the entertainment giant’s plans to reduce personnel count by around 7,000 across the company.

Former Disney consumer products executive Mike White led the company’s Metaverse division. Disney had tasked the team to develop new ways to tell interactive stories in new technological formats. However, the team’s roughly 50 members were all let go.

Disney’s former CEO, Bob Chapek, created the Metaverse division to become the “next great storytelling frontier.“

However, Disney’s plans for its metaverse division remained sketchy even a year after its creation. The firm had a few blurry ideas about applications in fantasy sports, theme-park attractions, etc. Additionally, Disney shelved plans to introduce a membership program similar to Amazon’s Prime program.

Disney Is Not The Only One Jumping Metaverse

When Metaverse first arrived, tech firms hurried to jump on the bandwagon. However, economic distress combined with other issues plaguing the sector. The Metaverse usually involves simulators, which can cause motion sickness called simulator sickness.

Additionally, the cost of equipment, like VR headsets, would prevent the widespread adoption of the technology. Furthermore, users might be susceptible to cyberbullying in the Metaverse. An immersive experience might make the bullying more traumatic for the victims.

Moreover, the lack of regulations in the sector might be hindering investors from entering the sector. Slow growth in the Metaverse’s popularity has frustrated the once-enthusiastic tech companies. For example, Microsoft scrapped its Metaverse program after just a four-month stint in Feb 2023.

The tech giant laid off nearly 100 employees, all part of its Industrial Metaverse program. Microsoft was looking into industrial applications of Metaverse to create new immersive software for operating industrial control systems.

Chinese tech giant Tencent laid off the staff in its ‘extended reality‘ team. In a report citing unnamed sources, Reuters stated the firm would give its more than 300 employees would get two months’ notice.

Meta, the parent company of Facebook and Instagram, announced plans to scale down investments in its Metaverse department. Interestingly, Meta’s Reality Labs’ reported $13.7 billion in 2022, compared to the firm’s $10.2 billion investment in the team.

The economic downturn forced firms to re-evaluate their investment and growth strategy.

A Bullish Pattern

Meanwhile, Disney stock formed a bullish pattern called the falling wedge.

In detail, the technical pattern forms when the price fluctuates inside a pair of falling trendlines that would converge down the slope. The outcome of such downside patterns is typically a price breakout to the upside.

The upside target for the breakout is equal to the maximum distance between the falling wedge’s upper and lower trendlines. DIS price might rise to $155 after confirming the pattern, rising 63% along the way.

Meanwhile, DIS share price dropped by 1.4% on March 27.