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

By
Ben Lang
-
48

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.

SEE ALSO
Meta Aims to Double, Possibly Even Triple Smart Glasses Production This Year

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.

This article may contain affiliate links. If you click an affiliate link and buy a product we may receive a small commission which helps support the publication. See here for more information.

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.

      • Octogod

        Don't forget to take your bleach!

        • ichigo

          Where the heck did telling someone to "take bleach" come from. This is what happens when people get dehumanized.

          • NL_VR

            i bet its a joke as americas president trump believed bleach was as good as vaccine or something :D

          • Octogod

            Bingo.

            Vasseur used "fake pandemic", indicating the COVID outbreak was a hoax. His party pushed this nonsense, while also telling people to take bleach or horse worm medicine as cures.

            I'm not dehumanizing. I'm asking him to be a good little solider and do what his master told him.

          • STL

            Covid vaxx was mass murder for big pharma profit, not only a hoax.

          • Grulk

            LOL….the cult continues to cult…

          • Octogod

            Context is really important in language.

  • 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.

    • NL_VR

      The become what EA once was. buy studios then shut them down.
      Only want to make games for the masses but there really isnt that scale of mass.

      • Dragon Marble

        What do you expect them to do? They built it, but no one came.

        • NL_VR

          They shouldnt have burn so much money on the Horizon World which is litterly just a temu copy of VRChat.

        • dextrovix

          Yes but for me, it's because they built a walled garden, and I wanted to play in the other bigger garden that distributes all my other games.

          • Hussain X

            This is why high end PCVR game funding was ended by platform owners. No incentive was left for Meta nor Valve to fund PCVR titles in order to attract PCVR market share.

    • Hussain X

      You mean yachts fleet was a cancer on VR? Meta used money made elsewhere to fund VR ie VR had net positive investment by Meta. Valve owner used money made from 30% fee charged to VR developers to fund yachts ie VR had net negative investment by Valve owner. Pity some VR studios didn't see that 30% fee be reinvested back into VR and are now gone.

      • Christian Schildwaechter

        As you seem to be really hung up about Gabe Newell buying a f%$&ing expensive yacht he now lives on full-time, maybe look at the USD 110M that Zuckerberg spent to buy his house in Palo Alto and about a dozen surrounding properties, plus the USD 59M for his two Lake Tahoe properties. Should he have invested those USD 169M into more VR games too? Or was spending about 250% of Valve's yearly total earnings every fiscal year at MRL alone enough, so that he is now allowed to pay whatever he likes for the place he wants to live?

        And consider that Newell's Leviathan not only contains 15 gaming station, but was also designed to serve as a dual-use luxury and research vessel with laboratories, a submarine port and facilities for marine research and exploration, while Zuckerberg's neighbors don't really like him living there for a number of reasons, from driving up prices over massively increased traffic to some very shady "non-profit" private school deals.

        • Hussain X

          Gabe Newell has many expensive yachts, not just one. I feel like Valve/Steam doesn't get criticized enough & instead gets praised for doing nothing, like some cult lord. Steam is just another billionaire owned company too taking 30% off hard working devs to fund a billionaire lifestyle without giving much back, especially to the starved VR industry which he can significantly influence upon for the good.

          About Zuckerberg, well you haven't criticised him enough. All billionaires need to stop being greedy & hoarding wealth whilst vast majority of society struggles. Given this is mainly about VR here (if it was non VR, I'd have significantly more criticism for Zuckerberg than Gabe), at least Zuckerberg was using some of the billions to grow VR, a form of entertainment for us poor pheasants, even if ultimately for his (Zuck's) own future benefit. We at least get to enjoy VR more than we otherwise could've otherwise. But Gabe just doesn't bother at all with VR & gets praised as if he's done a lot. If people criticised Gabe a lot, a lot more than deserved, I'd probably end up defending him too. But it's the other way round. He has done far less for VR than even Sony has for PSVR, forget even comparing to Meta.

          Finally, I'm a real enjoyer of Steam products, unlike worshippers of Steam. I want to enjoy more of what Steam could offer in VR, so I criticise it in the hope of getting them to give me more (maybe the only way if there is a monopoly like Steam & no competition to force it down more for consumers). Blindly worshipping, praising & giving priority to it will make it complacent, leading to a phenomena called Valve time. Life is too short for that.

          • Christian Schildwaechter

            The problem is that you mix up a personal aversion (billionaires, which I share up to a certain degree, hoping to see our societies move towards a fairer, more equalizing distribution of wealth) with some rather unrelated demands for company strategy. The worst part is equaling USD 1.6T Meta with USD 20B Valve and somehow deriving that one, driven by a cooperate overlord not really having to respond to other shareholders due to his artificial voting majority, and playing a very expensive pay-to-win game for becoming an even bigger overlord no longer depending on other trillion dollar companies Google and Apple, is somehow doing an acceptable job, while a privately owned company who's owner has deliberately kept it small to keep its working culture and flat hierarchies, is not. Valve doesn't fire 10K people each year, pays its employees a lot of money, with a head count about 2.5% of the one at MRL, or about 0.4% of Meta.

            Meta still makes almost USD 70B from USD 165B revenue each year AFTER burning USD 10B at MRL, while Valve's revenue is estimated to be roughly 10% that of Meta, around USD 16B. But Meta's revenue is mostly from ads with no third party to be payed, while Valve get's 30% (actually less on average), making USD 4-5B. Valve doesn't gain anything from their VR activities, their main income is both Steam game sales and earnings from running some of the most popular multiplayer games like DOTA, TF and CS. And while the ads Meta is shoving down people's throats with very questionable rage bait algorithms and regular inquiries about lacking privacy and hurting their users mental health, Valve offers the most beloved PC gaming store, even allowing devs to sell Steam keys somewhere else without compensating Valve while still offering all the services for free. Yes, devs have complained about the 30% for years, but stuck to Steam because nobody likes/uses the Epic store with much lower rates. In contrast to Apple, Google or Meta Valve never forces people into their ecosystem, you can install whatever you want on a Steam Deck.

            I'd agree that the Gaben worship is completely out of control, which that's not really his fault, he is actually a nice guy that others put on a throne without him ever aiming for that. But your whole argument is basically just "Gabe Newell is too rich", and you dislike that/him. It is not related to whether he got rich because Steam offered something people actually want, nor to what Valve has done for VR (which is, relative to it's size, way more than Meta), and completely ignores that this tiny company created the greatest VR game so far, developed much of what Oculus started with incl. what convinced Zuckerberg to buy them, with Facebook hiring away Valve's VR team. And they still kept pushing despite being extremely resource restricted, esp. with people.

            Basically buying yachts is evil (which I wouldn't even argue against), so Valve must be evil. But that is rubbish. Meta is operating in another dimension of evil, spent USD 100B for clear strategic reasons, with VR users being the lucky beneficiaries. And now that this obviously doesn't work out, they are pretty much dropping it, making another hundreds of billions of dollar bet with smartglasses again, for the same sinister reasons. Valve as a company certainly isn't a saint, but compared to Meta they are no doubt the good guys, and given their limited resources had a much larger impact on VR, and one that will be felt long after Meta has transitions the remains of Quest into some future smartglasses running their own lock-in ecosystem.

            And their owner fancying buying extremely expensive toys costing tons of money that could feed or cure thousands (or be wasted on VR games, for those who are fine with people starving/dying instead) doesn't change that. Criticism of capitalism is absolutely valid. Criticizing one particular example of excess, and then demanding that excess to be invested into your personal hobby instead, not even asking for something that would benefit a lot of people, which should be the goal of a fairer distribution of wealth, isn't all that valid, esp. if you keep on cherry picking and compare two very different companies with very different goals and available resources. Systemic problems need a broader approach, not just picking two things and declaring one of the evil for very arbitrary reasons.

  • 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.

    • Jonathan Winters III

      SAD but true. I'm amazed Zuck has managed to convince Meta's investors complacent while he bled money on VR for nearly a decade. It's been a great ride, hopefully they don't completely abandon VR.

      • Christian Schildwaechter

        It helps that Zuckerberg holds a lot of special founders shares with 10x the voting power that give him 60% of the total vote. He doesn't really have to convice other stockholders, he just has to inform them of his decisions, and the worst they can do to him is sell their stock and thereby somewhat lower Meta's market capitalization.

        There is no way that other investors would have let him spent about USD 100B spread over a decade on the hope that XR may one day become the next big thing after smartphones otherwise, and the only reason they didn't sell their shares is because Meta is still raining cash from ads even while burning USD 10B each year at MRL.

  • Both Asgard's Wrath 2 and Deadpool VR were good games, it's a pity these studios are being closed.

  • NL_VR

    Checking the comments here to read about all doom and gloom

  • Jonathan Winters III

    Looks like this site may become "road to MR", "road to AR", or "road to XR", as well over half the news postings this year are not about VR, but are about glasses. Sad times for VR!

    • NL_VR

      Yes for us that just want a VR headset to play games yes maybe. but everything VR is just a stepping stone to everything else.
      MR/AR/XR whatever doesnt mean VR dissapears, its the best "format" for Games in the segment

    • STL

      Roadtovr doesn’t cover great AR glasses, such as Even Realities G2. I wonder why…

      • Christian Schildwaechter

        I think the main reason is that RoadToVR is basically two people, and even though the "About/Contact" page states "We explore the bleeding edge of virtual reality, augmented reality, spatial computing, and human-computer interaction.", there is only so much you can do with limited time and resources.

        I checked a couple of times, estimates for monthly visits to the site are about 450K, with probably a 5:1 or higher ratio of visits to unique visitors. Asking Gemini for an estimate into the possible ad revenue on a niche tech site with 500K views gave me USD 5K-15K, so barely enough to keep two people and the site afloat with things like travel costs to AWE and others.

        I really like the Even Realities G2 (which I only know about because you regularly complained that nobody was covering them), but they are admittedly very niche, with a few dedicated use cases they do very well, but not the same broad AI driven ambition like Meta's Ray-Bay Display glasses. I wouldn't really consider them smartglasses, let alone AR glasses, given that they don't feature cameras, pretty much a requisite for augmenting reality. I started mentioning them regularly myself as an example for "doing one thing right" smartglasses with actual use cases, but understand why they aren't covered here.

        While researching them I stumbled on a number of websites dedicated to smartglasses and covering a lot of them I never knew about, including several which much more interesting open source approaches that allow people to create more uses for them, while Meta's "Wearables Device Access Toolkit" allowing iOS/Android devs some access to the smartglasses (basically use microphone and speakers, take pictures and start/stop) became available as a preview just about a month ago. So while technically technically smartglasses fall under RoadToVR's "bleeding edge" mission statement, I understand why they pretty much only cover those from major XR players and associates, and that more superficially, as this whole field is still rapidly developing with currently little overlap with XR HMDs.

        • STL

          Fair enough! However, while Ray-Ban Meta Smart Glasses will have to scale down, Even Realities G2 may scale up – finally they will meet in the middle. But the weight will be closer to the G2 than to the Ray-Ban, I hope.

  • uKER

    What prevents those people from continuing to work independently just like they did before Meta acquired them?

    • NL_VR

      nothing, income maybe so it will be freetime work

      • uKER

        Yep, you’re right on that one. At least until they land their first hit they’ll be running on fumes.

    • Christian Schildwaechter

      The fact that they would effectively have to form new companies, acquire outside funding from for example publishers willing to invest into a large VR title, which do not exist, plus the need to eat and pay rent. As Meta bought the studios and there IP, the developers couldn't simply release an Asgard's Wrath 3, they'd at least have to buy the rights back from Meta, which probably wouldn't be willing to sell them.

      Sanzaru Games, who created Asgard's Wrath, were founded 20 years ago by seven former Activision developers and released a number of games before moving towards VR. So they actually created a new company after leaving another large gaming company before, and had grown to about 100 people by the time Meta acquired them. But it would require a significant amount of money to sustain that team for the several years long development of a new game, with very questionable chances to ever make that money back, given the current developments in the VR market.

      The question is less what prevents them from continuing to work independently, and more how they are going to pay for it. Getting acquired by Meta with deep pockets and willing to burn money to establish a large VR user base was actually a way for studios to keep developing VR games despite low sales. It's not like Meta took away their freedom to reap the money from their efforts, it is more that Meta ensured their continued work without the studio having to leave VR as so many others had to. Given the current state of both the gaming industry and VR in particular, that was a pretty good deal.

  • Tonanamous

    Maybe that will free some of them up to work with Rockstar and get us GTA6VR asap.

  • Oxi

    And they just announced that Supernatural isn't getting any new content. What was the point of them cutting down and acquiring so much of the industry and putting themselves the center of it?

  • STL

    I actually bought and played quite a few of these games. None of them gave me anything remotely like PC VR games such as Skyrim VR. I always found the Quest 3 games very limited. Meta is going down the wrong path here. For me, VR headsets have so far only established themselves as a playback medium for highly optimized PC VR games and for spatial videos. Since I can't record spatial videos in good quality with the Quest 3, only play them back, it's limited to PC VR and nothing else. So I won't shed a tear for it!

    • Christian Schildwaechter

      Naturally people tried to stream Skyrim VR to Quest from a Steam Deck. Which technically worked, though with very questionable performance. Skyrim VR hasn't been updated since 2018 and will never see a native ARM port for Frame or even just native ETFR/DFR support, unless a miracle happens. And without extra optimizations, emulated x86 games will run on Frame about as fast as on the Steam Deck.

      But of course people hacked DFR into Skyrim VR for the Pimax Crystal, getting a moderate 20% FPS boost. And of course people will install Skyrim VR on Frame on day one. Depending on how clever eye tracking and FSR4 upscaling is integrated into Frame's virtual framebuffer, it may actually become playable on Frame, which could be kind of its most valuable unique selling point among all the available standalones, the only HMD allowing you to play both Beat Saber and Skyrim VR on the go.

      • STL

        Modded Skyrim VR (the only one worth playing) requires a decent GPU with considerable heat generation. This technical problem won’t be solved easily for a standalone VR device.

  • xyzs

    What a sad waste… I was supporting Meta for investing in VR, but my Quest 3 will likely be my last Meta product.

    They bought studios to just kill them. How pathetic.
    Ready at dawn had so much potential, they were doing great games, why destroying their future ??? Same for the others.

    They are either evil or idiots or both, there is no alternative.

    They could have achieved 30x better results if they did basic better choices:

    – keep the powerful Oculus brand.
    – stop wasting money in studio to kill them
    – focus on a clean ecosystem, not an advertising garbage platform people hate
    – trust that innovation and novelty will bring customers
    – do not abandon the high-end segment, it drives interest
    – spend a fraction of the billions into quality content sponsoring !!! (like how can billions land such a shit final result ??? Are they laundering money or what ???
    You give 10 millions to 100 trusted developing/mid size studios, that's just a 1 billion investment, that would have led to many marvellous games IPs, dozen of Moss-like successes, instead they spent DOZENS of billions on a shit show that is horizon world, that is ugly, hated and with no user…….)

    If Zuck played his early carrier like he plays now, he'd be serving bigmacs today.

  • Herbert Werters

    Now everyone is back on equal footing. Everyone was slagging off and putting Pico down. That was completely disproportionate. Now, soon, no platforms will have exclusive titles and there will be no reason to prefer any platform over another based on exaggerated arguments.

    Well, I can see something positive in that.

    If Facebook now launches the real hardware prices, then they will finally be playing fair in the VR market. Great. May the real favourite win! ;)

    • Christian Schildwaechter

      A great move would be Valve hurrying up to make SteamOS on ARM available to third parties, so others can start and release Frame like HMDs for cheap by getting Goertek to basically build Quest 3/Pico 4 clones with minor improvements like 2.5K resolution, which by now shouldn't be that expensive, to fill the gap that Meta may now leave.

      Valve's Lepton compatibility layer based on Waydroid does pretty much what Proton based on Wine does for Windows games, only for Android OpenXR games. And apparently pretty much every Quest game developers tried to run on Frame worked out of the box apart from things that explicitly require Horizon OS.

      With Meta distorting the market by subsidizing hardware on its way out, more players may be enticed to give it a try, esp. if they can lean on Steam and Frame to provide both Android APKs and ARM ports of PCVR games, while not being bound to the strict conditions that come with Google's Android XR, which isn't even open to everyone, and mostly about integrating Google's Gemini AI instead of games.

      • Herbert Werters

        Today I listened to a youtube talk about the new Lynx, and they were talking about how great it would be to use Horizon OS with it. ;) I just thought, hey, how about something open like Steam OS? I would love to see something like that happen. Yes, it will be interesting.

        • Christian Schildwaechter

          Doom and gloom:VR is dead.

          VR:Totgesagte leben länger.

          • Herbert Werters

            VR isn't dying. VR lebt. The question is whether it will grow or shrink. It won't disappear completely.

  • Rayza

    VR gaming is dead.

  • This just in, the rug pulling company has just rug pulled its devs and user yet again.
    Shock and awe ensues.