Meta has shut down three of its own VR studios as part of a strategic restructuring of its Reality Labs division. The layoffs are part of a larger plan to move the company’s investments away from the metaverse and toward wearable technology.
The closed VR studios and their impact on Meta’s future plans are significant
Meta’s content strategy for its Quest headsets has relied heavily on VR studios. Meta bought the three VR studios that are now closing—Twisted Pixel, Sanzaru Games, and Armature Studio—so that it could make a unique collection of games and experiences.
Former workers from these studios confirmed the closings on the internet. Twisted Pixel, the studio behind Marvel’s Deadpool VR, and Sanzaru Games, the studio behind the Asgard’s Wrath franchise, both posted about the studio closures.
The studio responsible for the popular Resident Evil 4 VR port, Armature Studio, also faced closures.
These VR studios are closing down, just like others that have closed under Meta. In 2024, the company shut down Ready at Dawn, the studio that made Echo VR. The team behind the VR fitness app Supernatural will also stop making new content, but current subscribers will still get help.
The strategic shift behind the VR Studios closure
The shutdown of these VR studios is not an isolated incident. This is part of a bigger cut that will affect about 10% of the people who work for Meta’s Reality Labs division. This division is responsible for the company’s plans for the metaverse and virtual reality.
A company spokesperson explained that the decision stemmed from a strategy shift that the company had announced a month prior. On purpose, Meta is shifting some of its funds from larger metaverse projects to the wearables category.
The company wants to use the money it saves from cuts, like shutting down the VR studios, to help its wearables business grow over the next year.
This restructuring shows how Meta’s long-term investment in immersive technologies is changing. It looks like making dedicated hardware is becoming more important than making games and software in-house at its own VR studios.
Disclaimer: This report is based on information from an internal memo obtained by Bloomberg and subsequent confirmation from Meta.
