Disney’s Continuing Dream Cosmic Universe

Disney's Ever-Evolving Cosmic Dream Universe

Author: Mu Mu, Exploding the Metaverse Day

Despite the dismantling of the entire metaverse department in March this year, Disney’s layout in the “3D Internet” has not stopped. From the grand narrative of the metaverse that gathers new technologies such as virtual reality, blockchain, AI, and cloud computing, Disney has chosen a more specific approach.

Recently, Disney announced its collaboration with Dapper Labs, the creator of the renowned NFT series “NBA Top Shot,” to launch the “Digital Badge” platform, Disney Pinnacle, based on the Flow blockchain network. This platform will also be available on the Apple App Store by the end of this year.

Earlier this year, Disney collaborated with Cryptoys to release a series of limited-edition “Star Wars” NFTs, and Dapper Labs was one of the investors in this project.

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In addition, Disney’s collaboration with Apple’s XR headset, Vision Pro, has long been in the works, planning to provide Disney+ streaming service for the headset upon its release.

For the metaverse, Disney is no longer investing heavily to build its own metaverse but instead is embedding its IP and content advantages into more fitting fields and strengthening external collaborations. This is not only because the realization of the metaverse takes time but also due to Disney’s revenue pressures.

Earlier this year, Disney underwent a massive restructuring, laying off 7,000 employees worldwide, in a cost-cutting effort that finally showed some results in the year-end financial report. The latest Disney financial data shows that the company’s revenue for the full fiscal year of 2023 was $88.898 billion (approximately ¥643.8 billion), an increase of 7% compared to the previous year.

01 Dreaming of the Metaverse and Falling into a Pit

“The metaverse will be Disney’s future.” This was the bold statement made by former Disney CEO Bob Chapek in November 2021.

Indeed, among many companies, Disney is seen as the “most suitable company to develop the metaverse.” With a wide range of film and animation IPs, including the futuristic Marvel IPs, even just bringing the theme parks into the virtual world sounds highly appealing. Disney seems naturally aligned with 3D, AR/VR technologies.

Chapek probably thought the same way. So, starting in February 2022, Disney officially formed the metaverse department and incorporated emerging technologies such as blockchain and virtual reality. Chapek’s blueprint was to “allow consumers to experience Disney’s products wherever they are.”

With the Disney platform as the entrance and around numerous IPs, Disney’s grand metaverse dream began.

Initially, the company created a “virtual world simulator of the real world” and deployed it in multiple Disney theme parks worldwide. This simulator allows classic IPs to interact with visitors in the park in 3D.

In addition to virtual reality, Disney’s interest in NFTs has been growing. Classic IPs created by its subsidiary, Pixar Animation Studios, have appeared on the NFT collectible platform VeVe. In March 2022, the platform obtained authorization to tokenize classic characters from “Toy Story,” “Cars,” “The Incredibles,” and “Up” and sell them to collectors.

“Cars” IP becomes an NFT collectible

From 2020 to 2022, all companies worldwide that pursued the metaverse concept faced a common reality: people couldn’t go out during the pandemic, and more content consumption happened online. This meant that all offline businesses were severely affected.

In this reality, it is understandable that Disney jumped on the metaverse trend towards the end of 2021 to capitalize on the story. Unfortunately, the results were not ideal: the stock price continuously declined (dropping over 40% in 2022), the streaming media business experienced losses, and revenues from cable television and movies kept declining.

The new and distant concept of the metaverse did not save Disney, so this media and entertainment giant quickly made adjustments.

In early 2023, Disney proposed a strategic restructuring, reducing costs by $5.5 billion. They laid off 7,000 employees, accounting for 3% of the workforce. The entire metaverse development department was even disbanded, and Bob Chapek, the CEO for only two and a half years, resigned, with the former CEO Bob Iger returning as the “firefighter captain.”

02 IP resources leaning towards NFTs

It was not until 2023 that countries around the world gradually liberated themselves from the pandemic, and the economy began to recover. People eagerly returned to offline life, and Disney’s cost-cutting measures finally paid off by the end of the year.

The latest financial report shows that Disney’s FY2023 revenue reached $88.898 billion, a 7% increase compared to the previous year. However, the net profit decreased by 25% to $2.354 billion.

With revenue growth and reduced costs beyond expectations, as well as an improvement in the streaming media user situation, Disney’s stock price rose by about 10% in the week following the financial report. Looking at the performance of various businesses, both revenue and profits from theme parks increased. Streaming media losses narrowed, and Disney+ added nearly 7 million new subscribers in the fourth quarter.

Current CEO Iger stated, “Although we still have work to do, these efforts allow us to surpass this recovery period and start building our business again.”

After recovering its vitality, Disney’s pursuit of new trends began again. Despite the disbandment of the metaverse department, the company left its footprint in related vertical applications of the metaverse in 2023: NFT and XR.

In November of this year, Disney announced a collaboration with NFT IP development company Dapper Labs to launch the NFT platform “Disney Pinnacle.” IPs from “Star Wars” and iconic characters created by Pixar Studio will be available in the form of NFTs.

Furthermore, Disney’s IPs in collaboration with NFT collectible platform VeVe last year are still expanding on the platform. NFT collectibles of characters such as Donald Duck and Ariel from “The Little Mermaid” have also appeared in VeVe’s marketplace.

At this year’s Apple Developer Conference, Iger also announced Disney’s collaboration with Apple. Disney+ streaming service will be available to all users when Vision Pro is released.

“We have always been looking for new ways to combine extraordinary creativity with breakthrough technology to create truly extraordinary experiences for our fans. And we believe Apple Vision Pro is a revolutionary platform that can make our vision a reality.”

Disiny+ will land on Vision Pro

When it comes to the metaverse, Disney seems to no longer be focused on building its own world, but chooses to work with partners to execute more specific landing scenarios. This giant has also seen its own advantages: content platform and IP.

Compared to Bob Chapek, who proposed the metaverse strategy, current CEO Bob Iger has more practically considered the input-output ratio of the metaverse. He wants to spend money where it can make money, selling IP NFTs to fans, and increasing revenue through Disney+ with headsets.

After all, the metaverse is an all-encompassing technological integration, involving cloud computing, artificial intelligence, virtual reality, blockchain, and other cutting-edge technologies. XR, blockchain, and AI are still in the early stages of development. It will take all technologies to take shape on the original hardware for the dream of the “3D Internet” metaverse to become a reality.

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