Meta has delivered a significant blow to its internal virtual reality ecosystem, Reality Labs, by officially shutting down three established studios: Twisted Pixel, Sanzaru Games, and Armature Studio. These developers, which Meta acquired over the past five years to bolster its VR software portfolio, are being closed as part of a substantial corporate restructuring.
The studio closures coincide with major layoffs across the Reality Labs division, impacting over 1,000 employees—roughly 10 percent of the division responsible for Meta Quest headsets and related software. This move signals a pronounced strategic pivot for Meta, which confirmed it is shifting investment away from its long-term Metaverse vision and redirecting resources toward burgeoning areas like AI wearables and core phone features.
The eliminated teams include developers responsible for some of Meta’s most high-profile VR titles. Sanzaru Games was the studio behind the critically acclaimed *Asgard’s Wrath 2*, while Armature Studio handled the popular *Resident Evil 4 VR* port. Twisted Pixel was known for titles such as *Marvel’s Deadpool VR*.
While the swift shuttering of acquired studios raises concerns about the future of first-party VR content (a fate previously met by Ready At Dawn in 2024), Meta maintains that it remains dedicated to the gaming space. The company intends to focus on “long-term sustainability” by reinvesting resources to support the growth of third-party developers and partners moving forward.