Meta has confirmed a major strategic shift that has resulted in the closure of three previously acquired, in-house virtual reality studios: Sanzaru Games, Twisted Pixel, and Armature Studio. The studios were shuttered as part of a severe round of layoffs impacting the company’s VR-focused division, Reality Labs. Over 1,000 employees, representing about 10% of Reality Labs’ staff, are being laid off as Meta drastically reallocates resources.
These closures eliminate some of the biggest names in Meta’s Quest development history. Sanzaru, acquired in 2020, was responsible for the critically praised *Asgard’s Wrath 2*. Armature Studio, which delivered the landmark *Resident Evil 4 VR* port, and Twisted Pixel, known for games like *Marvel’s Deadpool VR*, have also ceased operations.
The move confirms a dramatic change in Meta’s priorities. A company spokesperson stated that investment is being deliberately shifted away from first-party VR and Metaverse development toward new ventures in AI wearables and advanced phone features. While the culling of internal development capacity raises serious concerns about the future of exclusive Meta Quest software, the company maintains that it is still dedicated to gaming. Moving forward, Meta plans to focus its investment on bolstering relationships with third-party developers and partners to ensure “long-term sustainability” in the competitive VR market.