Disney CEO Josh D’Amaro’s rocky start: ‘Fortnite’ and OpenAI troubles
Walt Disney Co. Chief Executive Officer Josh D’Amaro has not yet completed his first week in the role, and he has already witnessed two billion-dollar technology investments stumble — with one of them completely falling apart. On Tuesday, Epic Games Inc. announced the layoff of 1,000 employees following the disappointing reception of new versions of its popular video game Fortnite among fans. Two years ago, Disney revealed a $1.5 billion investment in Epic, which encompasses the development of an entirely new digital universe linked to Disney characters and narratives. Shortly thereafter, OpenAI revealed its decision to discontinue Sora, the AI video generator. The company announced the termination of its partnership with Disney, which was set to involve a $1 billion equity investment in OpenAI and the utilization of its technology for content creation. The decision to close Sora aligns with OpenAI’s initiative to refine its product offerings.
D’Amaro assumed the role of CEO from Bob Iger on March 18. During the company’s annual meeting that day, D’Amaro articulated his vision for a Disney that would foster a deeper connection with fans, partly by leveraging new technologies. The company’s Disney+ streaming service, he stated, will serve as a portal to engage with not only movies and TV shows, but also games and experiences. His aim was to “deliver a more connected, personalized, and immersive experience to our consumers – wherever they are and whenever they would like to engage with us.” On Tuesday, Disney shares experienced a decline, closing down 1.6 percent. The Epic deal was spearheaded by D’Amaro, who oversaw Disney’s theme parks, consumer products, and gaming divisions. In announcing the partnership, Disney unveiled illustrations of an online Fortnite world that resembled a theme park significantly. D’Amaro has taken a position on Epic’s board as an observer.
In a memo to staff and fans on Tuesday, Epic founder Tim Sweeney stated that a downturn in Fortnite engagement had resulted in the company spending more than it was earning. According to Sweeney, the company is expected to be well-positioned for “huge launch plans towards the end of the year” following $500 million in cost cuts. He did not comment on the new Disney product. In a similar vein, the Sora partnership was anticipated to mark the beginning of something significant. It represented one of the initial efforts between a traditional Hollywood studio and emerging technology, which has raised concerns among many in the industry about potential job losses and the risk of intellectual property theft. Disney revealed its intentions merely four months prior to allow fans to craft short social videos featuring the company’s iconic characters by simply speaking a few words in an app.
Approximately 200 characters from Star Wars, Marvel, and various other brands will be accessible, along with costumes and vehicles included. Disney had intentions to feature certain fan-created videos on its streaming service. Following Sora’s demise, Disney remarked that the artificial intelligence field is still in its early stages, where change occurs rapidly. The company expressed its gratitude for the collaboration with the Sora team and stated it will “continue to engage with AI platforms to find new ways to meet fans.” D’Amaro may still discover a new AI partner. Runway Ai, Pika Ai, and Google are among the companies developing products comparable to Sora.
