Meta Shuts Down Three Major VR Studios in Reality Labs Restructuring
Meta has closed Twisted Pixel, Sanzaru Games, and Armature Studio, marking a significant retreat from VR game development and triggering substantial layoffs across its Reality Labs division.
The VR Game Reckoning Has Arrived
Meta's commitment to the metaverse just took another hit. The company has shuttered three major VR game studios — Twisted Pixel, Sanzaru Games, and Armature Studio — in a sweeping restructuring of its Reality Labs division. This move eliminates the teams behind some of the most acclaimed VR titles in recent memory, including Deadpool & Wolverine: Deathtrap, Asgard's Wrath 2, and Resident Evil 4 VR. The closures represent a dramatic pivot away from internal game development and underscore mounting pressure on Meta's sprawling metaverse ambitions.
What's Being Lost
The three studios represent different eras of Meta's VR gaming strategy:
- Twisted Pixel: Known for creative, action-oriented VR experiences and the Deadpool collaboration
- Sanzaru Games: Developed Asgard's Wrath 2, a flagship VR title that demonstrated the potential of console-quality experiences on headsets
- Armature Studio: Created the acclaimed Resident Evil 4 VR port, proving that AAA franchises could translate to VR
According to reporting from Upload VR, these closures are part of a broader Reality Labs restructuring that will impact hundreds of employees. Game Developer magazine notes that the layoffs extend beyond just these three studios, suggesting a wholesale rethinking of Meta's VR content strategy.
The Broader Context
This isn't Meta's first retreat from VR gaming. The company has consistently struggled to build a sustainable business model around VR content, despite investing billions into the metaverse vision. The closure of these studios signals that Meta is abandoning the "build it ourselves" approach in favor of a different strategy — though the company hasn't clearly articulated what comes next.
Gematsu's coverage confirms that this restructuring affects multiple divisions within Reality Labs, suggesting a fundamental reassessment of priorities. The timing is notable: it comes as Meta faces increasing scrutiny over the profitability of its metaverse investments and growing competition from other VR platforms.
What This Means for VR Gaming
The closure of these studios raises critical questions about the future of VR gaming as a mainstream medium. GameSpot's analysis highlights that losing studios capable of producing AAA-quality VR experiences could further fragment the market and reduce the incentive for major publishers to invest in VR content.
For developers and employees affected by these closures, the impact is immediate and severe. Hundreds of skilled VR game developers are now seeking new opportunities in an already competitive job market. Some may migrate to other VR platforms or return to traditional game development.
The Bigger Picture
Meta's retreat from internal VR game development reflects a harsh reality: the metaverse hasn't materialized as promised, and consumer appetite for VR gaming remains niche. While VR technology continues to improve, the software ecosystem hasn't kept pace with hardware capabilities. Meta's decision to close these studios suggests the company is finally acknowledging that throwing money at the problem won't solve it.
The question now is whether Meta will pivot toward licensing third-party content, investing in smaller indie developers, or abandoning VR gaming altogether in favor of other Reality Labs initiatives. Until the company clarifies its strategy, the VR gaming industry faces significant uncertainty about its largest corporate backer's commitment to the medium.
