Meta Shuts Down VR Studios in Reality Labs Overhaul

Meta is executing a major workforce reduction within its Reality Labs division, the arm of the company responsible for the metaverse and virtual reality initiatives. The restructuring reportedly affects approximately 10 percent of the division's staff.

Alongside the layoffs, Meta appears to be shuttering several key VR gaming studios. These closures include Twisted Pixel Games, Sanzaru Games, and Armature Studio. These studios were instrumental in developing some of the most recognizable titles in the VR library, marking a significant shift in Meta's content strategy.

The extent of the shutdowns was revealed through social media posts by affected employees. Andy Gentile, a former level designer at Twisted Pixel Games, publicly announced his termination and the closure of the studio.

According to reports, the following studios are being shut down:

• Twisted Pixel Games - Developer of Marvel's Deadpool VR
• Sanzaru Games - Creator of the Asgard's Wrath franchise
• Armature Studio - Known for the Resident Evil 4 VR port

Additional laid-off staff members have corroborated these closures across various platforms, confirming that the cuts are widespread across the division's development teams.

The decision to close these internal development teams appears to be driven by a change in corporate direction. Former Twisted Pixel employees have cited strategy changes at Meta as the primary reason for the studio's dissolution.

"Unfortunately, Twisted Pixel Games has been closed as a result of strategy changes at Meta."

This restructuring suggests that Meta may be moving away from in-house AAA game development for VR. The loss of studios responsible for major franchises like Asgard's Wrath indicates a potential shift toward third-party partnerships or a refocusing on core platform infrastructure rather than exclusive content creation.

The shutdown of these studios represents a significant blow to the virtual reality ecosystem. These developers were among the few with the resources and expertise to build high-fidelity, long-form VR experiences.

The specific impact includes:

• Uncertainty regarding the future of Marvel's Deadpool VR
• Ceased development on future Asgard's Wrath sequels
• Loss of specialized talent in the VR development community

While Meta continues to invest in hardware like the Quest headsets, the reduction in first-party software development raises questions about the platform's exclusive content pipeline moving forward.

The closure of Twisted Pixel, Sanzaru, and Armature marks a defining moment for Meta's Reality Labs. As the company navigates economic pressures, the focus appears to be shifting away from internal AAA game production.

For the VR industry, this consolidation of talent suggests a potential migration of experienced developers to independent studios or competing platforms. The long-term effects of this strategy shift will depend on how Meta chooses to support its VR ecosystem without its flagship internal development teams.