Meta is dramatically restructuring its virtual reality division, Reality Labs, confirming the immediate closure of three established development houses: Twisted Pixel, Sanzaru Games, and Armature Studio. These studio shutdowns are occurring as part of a significant reduction in force, with reports indicating that Meta is cutting over 1,000 jobs—affecting roughly 10 percent of Reality Labs’ 15,000 employees.
This sweeping move signals a major strategic pivot, as Meta shifts investment away from proprietary VR content and its metaverse vision toward developing AI wearables and integrated phone features. A company spokesperson confirmed the resource reallocation, noting that the savings would be reinvested to support the growth of wearables this year.
All three affected studios were relatively recent acquisitions known for delivering high-profile experiences within the Meta Quest ecosystem. Sanzaru Games, acquired in 2020, was responsible for the critically acclaimed *Asgard’s Wrath 2*. Armature Studio, acquired in 2022, brought the hugely successful *Resident Evil 4 VR* to the platform. Similarly, Twisted Pixel, acquired in 2022, delivered titles like *Marvel’s Deadpool VR*.
Despite the closure of these internal teams, the company insists it remains committed to the VR gaming landscape. According to internal communications, Meta is now focused on ensuring long-term sustainability by shifting investment heavily toward third-party developers and external partners, rather than maintaining large first-party studios.