Meta Reportedly Closes Three First-party Studios Behind Some of Its Biggest VR Games

By
Ben Lang
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6

Against the backdrop of a broader shuffling of its Reality Labs division, Meta is reportedly closing Armature Studio, Twisted Pixel, and Sanzaru Games, three studios that Meta had previously acquired. The studios were behind some of the company’s biggest first-party VR games, including Deadpool VR, Asgard’s Wrath, and the Resident Evil 4 Quest port.

According to reports by Kotaku and Bloomberg, Meta is shuttering the three studios this week and laying off most or all of their staff.

Among the three studios, Sanzaru Games was the first to be acquired in 2019. The studio was known for the Asgard’s Wrath series, the first of which was released on Meta’s PC VR platform, and the sequel on its Quest platform. Twisted Pixel was acquired in 2022 and was known for Deadpool VR which was released barely two months ago. Armature Studio was behind the Resident Evil 4 port for Quest.

Starting in 2019, Meta acquired nine prominent VR studios. With today’s news, the company has now shuttered the majority of those studios. Here’s the scorecard as we know it:

Acquired Meta VR Studios Still Operating

  • Beat Games – known for Beat Saber, acquired 2019
  • BigBox VR – known for Population: One, acquired 2021
  • Within – known for Supernatural, acquired 2021
  • Camouflaj – known for Batman Arkham VR, acquired 2022

Acquired Meta VR Studios Shuttered

  • Sanzaru Games – known for Asgard’s Wrath, acquired 2020
    • Shuttered 2026
  • Ready at Dawn – known for Lone Echo, acquired 2020
    • Shuttered 2024
  • Downpour Interactive – known for Onward, acquired 2021
    • Shuttered 2025
  • Twisted Pixel – known for Deadpool VR, acquired 2022
    • Shuttered 2026
  • Armature Studio – known for Resident Evil 4 VR, acquired 2022
    • Shuttered 2026

The cluster of new closures comes against a backdrop of a broader shuffling of Meta’s Reality Labs division. The last few months have seen lots of reporting about Meta shifting some focus away from immersive VR devices and toward more AI-focused devices like the company’s Ray-Ban and Oakley glasses.

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It would seem this moment could be the largest reorganization of the division since Meta first dubbed its AR/VR division “Reality Labs” back in 2020. The company is reportedly laying off 10% of the Reality Labs workforce, which appears to include this latest round of studio closures.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • JB1968

    Nothing unpredictable. Where are the Meta lovers now?

    • Peter vasseur

      They’re all fake just like quest. Quest would have never been anywhere near what it was, if it wasn’t for the fake pandemic, that allowed the highly subsidized quest 2 to sell millions. It’s was always a house of cards, because it wasn’t built on fundamentals. Zombie company from day 1.

      • g-man

        That’s a lengthy way to virtue signal being an idiot.

  • g-man

    Fuckerbook was a cancer on VR. We will be better off without them in the long run. Pity some good studios sold out to them and are now gone.

  • Yeshaya

    Feels like them acquiring a lot of these studios was more about the exclusivity than supporting more games. Frustrating they'd rather have Asgard's Wrath 2 (Exclusively on Quest!!!) then shut down rather than let there be AW 2 AND 3 available on any headset.

  • Christian Schildwaechter

    Of the four remaining studios, only Beat Saber and Within/Supernatural are profitable, the first thanks to lots of music pack DLCs, the latter due to its monthly subscriptions. Pretty much everything else has lost money, as even highly praised titles from extremely popular franchises like RE4 neither brought in large amounts of new users, nor sold in huge enough numbers to pay for their development. RE4 VR dropped out of the Horizon Store top 20 not even a year after its release, Asgard's Wrath 2 the moment it was no longer bundled for free with new Quests.

    Meta buying studios, then barely having them release new games, and finally shutting them down of course sucks. But it is kind of hard to blame them for this, as the market has developed differently than both Meta and most VR enthusiasts expected. While many believed that what kept most gamers from using VR was a lack of high profile AAA titles, none of those that Meta paid a lot of money for actually drew in the masses. The sales top 20 have for years been dominated by mostly casual titles featuring short session lengths with often very physical game play emphasizing movement in VR (like Beat Saber and Supernatural), not games featuring long campaigns and cutting edge graphics. And Gorilla Tag is now chasing after Beat Saber and Supernatural for the highest VR revenue crown.

    Sure, it would be great if Meta decided to give it another try, keep the studios open and release more high profile games. But there are no indicators that this would do much beyond keeping the VR enthusiasts happy, which have shown to be a rather small group of users that in no way generate enough revenue to pay for the development of any of these large scale titles.