Meta Shuts VR Game Studios After $70bn Losses

Meta is cutting about 10% of its Reality Labs workforce and shutting down several virtual reality (VR) game studios as it retreats from an expensive investment that has yet to pay off.

The layoffs hit the heart of Meta’s VR gaming. Twisted Pixel Games, Sanzaru Games and Armature Studio are being closed, bringing an end to teams behind titles linked to Deadpool, Asgard’s Wrath and the VR version of Resident Evil 4. 

Work on new features and content for the Supernatural fitness app has also been stopped, although the app itself will continue to run in its current form.

This looks like a retreat as Reality Labs has lost more than $70bn since 2021, driven by heavy spending on headsets, software and in-house studios that failed to reach a mass audience. 

The latest round of cuts affects more than 1,000 roles and removes roughly one in ten staff from the division.

Several projects that never reached the public are also being scrapped. Among them are a virtual reality Harry Potter title reportedly in development and scaled-back work at Camouflaj, the studio behind Batman: Arkham Shadow. These decisions reveal how much Meta is narrowing its focus, away from the VR game studios, among other areas.

VR gaming, once described as an important pillar of the metaverse, is no longer at the centre of the plan. The company is redirecting money and talent towards artificial intelligence and augmented reality hardware, with particular emphasis on its Ray-Ban Meta smart glasses. 

Mark Zuckerberg has described these devices as a more realistic path to growth than fully immersive virtual worlds.

The transition is also changing how Meta courts developers. Instead of funding expensive, VR-only titles, the company is encouraging creators from platforms such as Roblox to build lighter, mobile-friendly experiences for Horizon Worlds. 

It is a move away from grand, hardware-heavy ideas towards products that can scale faster and cost less.

The metaverse vision is not gone, but it is being changed to be cheaper, and far less dependent on blockbuster virtual reality games.