Disney has announced that it is abandoning plans to explore the metaverse, and the news has vibrated through many parts of the Web3 industry including cryptocurrencies.
The animator, together with major fashion brands (Gucci, Louis Vuitton, Rolex, Yves Saint Laurent and Nike), automotive companies Mercedes-Benz and BMW, and fellow media company Warner Brothers, are the pioneer companies that have filed for NFT and metaverse trademarks with the United States Postal and Trademark Office (USPTO).
According to the Wall Street Journal, around 50 employees in Disney’s metaverse division have been dismissed. The layoff in the AR and VR-powered division represents a modest fraction of the company’s downsizing that will see about 7,000 lose their jobs.
While the mass media, multinational, and entertainment conglomerate has been experimenting with several technologies under the metaverse banner, including producing AR films, creating virtual stores, and integrating blockchain technology, the slow adoption of the virtual world has made the sector largely unprofitable for Disney and other firms.
The latest development has not just affected Disney employees. Stakeholders of the crypto economy, particularly Polygon (MATIC) holders, have also seen a substantial reduction in their portfolios amid the layoffs.
Polygon (MATIC) is down by 12% in March
In July 2022, Polygon was selected along with Red 6, Obsess, Lockerverse, Inworld, and Flickplay as the six participants for Disney’s Accelerator Program. The Program came with a vision of building the future of immersive experiences with a primary focus on artificial intelligence (AI) characters, NFTs, and ARs. As an integral part of the NFT industry, Polygon ranks 5th on the log of blockchains by all-time NFT sales volume with approximately $764 million from 1.05 million buyers involved in over 6 million transactions. Disney’s association with Polygon at the time led to a 94% spike in the price of MATIC after opening and closing the month with trading prices of $0.4781 and $0.9283 respectively.
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The opposite reaction has been felt in MATIC’s price due to the layoffs. MATIC is down by 12% in March after opening the month strongly at $1.1952 and declining to $1.0470, as of 09:30 UTC on March 28.
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