Meta Shuts Down Multiple VR Studios

Meta has reportedly closed several of its internal virtual reality studios as part of broader restructuring efforts within its Reality Labs division. Former employees confirmed the shutdowns on social media, signaling another major shift in the company’s long-term VR strategy.

Among the affected teams are Twisted Pixel Games and Sanzaru Games, two studios that played important roles in Meta’s VR gaming portfolio.

Twisted Pixel Games Closure Confirmed

Twisted Pixel Games, founded in 2006, built its reputation during the Xbox Live Arcade era with titles such as The Maw, Splosion Man, and Ms. Splosion Man. The studio later expanded into VR development and was acquired by Meta in November 2021.

Most recently, Twisted Pixel released Marvel’s Deadpool VR for Meta Quest 3, marking one of its highest-profile projects under Meta ownership.

Andy Gentile, a designer at Twisted Pixel, publicly confirmed the layoffs on X (formerly Twitter), stating that the entire studio appears to have been shut down.

Sanzaru Games Also Affected

Sanzaru Games, also established in 2006, initially focused on ports and remastered editions of popular Sony franchises, including Secret Agent Clank, The Sly Collection, and God of War Collection.

In 2019, the studio made a major move into virtual reality with the release of Asgard’s Wrath for the original Oculus Rift — one of the platform’s most ambitious titles at the time. Following Meta’s acquisition, Sanzaru began working on a sequel within the VR ecosystem.

Ray West, a senior designer at Sanzaru, confirmed the closure on LinkedIn, praising the team while noting that he is now open to new opportunities.

Part of Broader Reality Labs Layoffs

According to reporting from The New York Times, Meta plans to cut approximately 10% of staff within its Reality Labs division. This unit oversees VR hardware, gaming initiatives, and the company’s broader metaverse ambitions.

Andrew Bosworth, head of Reality Labs, reportedly described an internal meeting regarding the restructuring as one of the most significant of the year.

Is Meta Scaling Back VR?

The closures suggest a possible recalibration of Meta’s priorities. While the company continues to develop VR hardware such as the Quest lineup, resources appear to be shifting toward artificial intelligence research and wearable technologies — including smart glasses and wrist-based devices.

In recent months, Meta has increasingly emphasized AI integration across its ecosystem, positioning it as a central pillar of future growth.

Whether these studio closures represent a temporary adjustment or a deeper retreat from large-scale VR game development remains unclear. However, the move signals that even major players in the virtual reality space are reevaluating their investment strategies amid changing market dynamics.

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