Meta is closing its main virtual reality studios

Meta has made a radical change in its virtual reality strategy by close three of its most important internal studios dedicated to the development of video games for their Quest headsetsThe decision comes after years of heavy investment in the metaverse that have failed to translate into satisfactory financial results and is part of a broader restructuring plan within Reality Labs. The company is thus redirecting its resources towards the artificial intelligence and wearable devices, putting their big bet on the metaverse in the background.

The movement directly affects Armature Studio, Sanzaru Games and Twisted Pixel GamesKey pieces of Meta's VR catalog will be affected, and the company will also lay off more than a thousand employees worldwide, including teams with a presence in the United States and Europe. The company is thus redirecting its resources towards... artificial intelligence and wearable devices, putting their big bet on the metaverse in the background.

Which studies is Meta closing and why are they so relevant?

The company has confirmed at least the Complete closure of Armature Studio, Sanzaru Games and Twisted PixelThese three teams, which until now were part of the Oculus Studios structure within Reality Labs, were responsible for some of the most talked-about games in the Meta Quest catalog, making this decision a turning point for the company's content strategy.

Armature StudioFounded in 2008 by Retro Studios veterans (with a background in the Metroid Prime series), Meta joined in October 2022. Before focusing on VR, they had worked on titles such as ReCore o Where the Heart Leads...in addition to numerous console ports. Within the Quest ecosystem, its flagship project has been the Resident Evil 4 adaptation to virtual reality, one of the platform's biggest selling points.

In parallel, Sanzaru GamesThe studio, acquired by Meta in 2020, had made a name for itself in the VR action and role-playing genre. After collaborating for years with Sony on projects such as Sly Cooper: Thieves in Time o The Sly CollectionThe studio made the definitive leap into virtual reality with Asgard's Wrath and its sequel, Asgard's Wrath 2, considered by many players as some of the most ambitious titles in the medium and highly rated on review aggregators such as Metacritic.

Twisted Pixel GamesFor its part, it had been releasing games with its own personality since 2006, initially linked to the Xbox 360 and Xbox Live Arcade ecosystem with titles such as The Maw, 'Splosion Man, Ms. 'Splosion Man' o Comic JumperAfter its time at Microsoft Studios (2011-2015), the studio was acquired by Meta in 2022 and focused its efforts on VR, signing projects such as Path of the Warrior and, more recently, Marvel's Deadpool VR, released in late 2025 for Meta Quest 3.

The wave of layoffs at Reality Labs and the end of the metaverse “dream”

The closure of these three studios is part of a wave of more than 1.000 layoffs at Reality LabsThe division in charge of virtual and augmented reality at Meta. Various internal sources and media outlets such as Bloomberg and The New York Times indicate that the cuts affect approximately 10% of the workforce of this unit, made up of about 15.000 workers.

Reality Labs, responsible for the headsets since 2020 Meta Quest and much of the development surrounding the metaverse, had accumulated very significant losses. Since 2021, investments in this area would have generated losses exceeding 60.000-70.000 billion dollars, a figure that has ended up weighing heavily on the decisions of the company's top management.

The layoffs are not an isolated incident: in April 2025 there had already been one first round of cuts at Reality Labswith nearly a hundred employees affected. With this new adjustment, Meta confirms a strategic shift that makes it clear the initial push for the metaverse has cooled considerably, despite the significant media attention surrounding Facebook's name change to Meta in 2020.

Internal sources, such as the Chief Technology Officer Andrew BosworthThey have explained in communications to employees that the objective is redirect part of the investment carried out so far in virtual reality towards other lines of business considered more promising, such as generative artificial intelligence and wearable devices. This same idea has been reiterated in statements sent to international media.

This situation adds to a broader climate of cuts in the video game industryWith thousands of layoffs expected in 2025 and 2026 at companies like Microsoft and Ubisoft, the closure of Meta's studios is seen as another episode in a worrying trend for industry professionals.

Developer reactions and the impact on the VR community

The news of the studio closure didn't arrive solely through official statements. Several affected workers were the first to... announce their layoffs on social media, giving visibility to the situation and confirming the scope of the restructuring even before Meta made a public statement.

The designer Andy Gentile, from Twisted Pixel, shared a message on X explaining that he had just been fired and that The entire studio had been shut down.They also mentioned the closure of Sanzaru Games. Other employees expressed similar sentiments, thanking their colleagues for the years of working together and indicating that they were beginning to look for new opportunities in the industry.

From Sanzaru Gamesprofessionals such as the senior level designer Ray West LinkedIn confirmed that the closure affected several video game studios within Metanot only to his team. In his messages, West highlighted the talent and effort of the group, while also showing his willingness to continue his career in other projects.

In the case of Armature StudioThe confirmation of its closure also came through reports from specialized media outlets, which gathered testimonies from employees and sources close to the studio. For the virtual reality community, the news represents the loss of a team that had demonstrated an ability to adapt major franchises to the VR format with remarkable results.

On social media and gaming forums, the closure of these three studios has been interpreted as a sign that Meta is clearly lowering its ambitions in the field of virtual reality gamesAt least as far as internal development is concerned. Although the company insists it won't completely abandon VR, many users are wondering what will happen to future sequels, additional content, or new big-budget projects for Meta Quest.

Supernatural, Ready at Dawn and the thinning of the content ecosystem

Meta's restructuring isn't limited to the closures of Armature, Sanzaru, and Twisted Pixel. The company has also decided halt active development of the Supernatural VR fitness appwhich will no longer receive updates. In an environment as dependent on constant improvements as virtual reality, this type of measure is interpreted as a kind of "slow death" for the platform.

Within the Oculus Studios umbrella, movements in the same direction had already been taking place. It was closed in 2024. Ready at Dawn, responsible for titles such as The Order: 1886 and the series Lone Echo, one of the most prominent VR projects on PC. More recently, Meta has merged Camouflage (known for Batman: Arkham Shadow) with Downpour Interactive (Onward), concentrating resources and reducing structures.

Despite the closures, Meta maintains other active reference studios in virtual reality, such as Beat Games (creators of the successful Beat Saber), BigBox VR (Population: One) and equipment linked to Horizon Worlds, like Ouro and Glasswords. However, the general feeling is that the company is noticeably thinning its internal muscle development and increasingly relying on external collaborations and social experiences within its platform.

In this context, some reports suggest that Meta will try attract developers from other ecosystems, like the creators of experiences for Roblox, with the idea that they take their proposals to Horizon WorldsThe goal would be to keep the social metaverse alive with less direct investment in large-scale, original productions.

All of this raises doubts about the rate of arrival of New high-budget games for Meta QuestThis comes at a time when competition in mixed and augmented reality is intensifying and other tech giants are experimenting with similar models.

From betting on the metaverse to prioritizing AI and smart glasses

When Facebook adopted the name of Goal In 2020, the message was clear: the the metaverse became the central axis The company presented a persistent, shared 3D environment, accessible through avatars and immersive devices, where people could work, socialize, and play. Several years later, the reality is much more nuanced.

The company has acknowledged the heavy investments made in Reality Labs they have not translated into significant revenueMeanwhile, other products have been much more favorably received. This is the case with... Smart glasses developed in partnership with EssilorLuxotticawhose demand has led Meta to request a Doubling of production capacity by the end of 2026.

In this shift, artificial intelligence is at the heart of the new roadmap. Meta wants to integrate AI models into its traditional social networks (Facebook, Instagram, WhatsAppas well as in new portable devices, from smart glasses to future wearables. Reality Labs, in fact, was already reorganized in 2024 to more clearly separate the lines of work in wearables and those of pure virtual reality.

This change in focus is also reflected in other strategic decisions, such as the long-term energy supply agreements to feed large AI training clusters in the United States. While not directly related to the closure of VR studios, they illustrate how corporate priorities have shifted toward AI-oriented infrastructure and technologies.

In the realm of the metaverse, the platform Meta Horizon It is still underway, but its role is being redefined more as social space and community building than the vast virtual universe that was initially presented. The closure of studios focused on large-scale games fits with this more contained vision of the project.

This entire process of cutbacks, closures, and strategic reorientation paints a picture in which Meta is clearly reducing its exposure to the internal development of virtual reality video games. And it's betting on a less expensive model, more community-driven and, above all, aligned with artificial intelligence and wearable devices. For VR gamers and professionals, this moment feels like a turning point: some of the biggest names in the Quest catalog are being discontinued, while the company doubles down on the technologies it considers most profitable for the coming years.

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Alberto Navarro

I am a technology enthusiast who has turned his "geek" interests into a profession. I have spent more than 10 years of my life using cutting-edge technology and tinkering with all kinds of programs out of pure curiosity. Now I have specialized in computer technology and video games. This is because for more than 5 years I have been writing for various websites on technology and video games, creating articles that seek to give you the information you need in a language that is understandable to everyone.

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