Meta to Cut More Than 1,000 Reality Labs Jobs and Close Three Game Studios

MENLO PARK, Calif. — Meta Platforms is closing three of its in-house video game studios and cutting more than 1,000 jobs in its Reality Labs division, the unit responsible for the company’s virtual reality headsets and related software.

The company confirmed on Tuesday that Armature Studio, Sanzaru Games and Twisted Pixel would be shut down. The closures came the same day that Bloomberg reported Meta planned to eliminate more than 1,000 positions in Reality Labs.

A Shift Toward Wearables

In a statement to gaming news site Gematsu, a Meta spokesperson tied the move to a strategy the company outlined in December, saying Meta was moving some of its investment away from the metaverse and toward wearables. The spokesperson said the savings would be reinvested to support the growth of its wearables business this year.

Meta’s wearables push centers on smart glasses and other devices that bring its artificial intelligence assistant into everyday use, an area the company has highlighted as a growth opportunity. Reality Labs has for years been the costliest part of Meta’s business, absorbing large sums as the company pursued its vision of immersive virtual worlds.

The Studios Affected

All three studios were acquired by Meta during its expansion into virtual reality content. Sanzaru Games joined the company in February 2020, while Twisted Pixel and Armature Studio were acquired in October 2022.

Sanzaru developed the virtual reality titles Asgard’s Wrath and its sequel, Asgard’s Wrath 2, under the Oculus Studios label. Before joining Meta, the studio was known for work on Sony-published titles including Secret Agent Clank, The Sly Collection and Sly Cooper: Thieves in Time, as well as two Sonic Boom games for Sega.

Twisted Pixel most recently produced Marvel’s Deadpool VR for Oculus Studios. The Texas-based developer first built its reputation with Xbox 360 releases such as ‘Splosion Man and Ms. Splosion Man.

Armature Studio created the virtual reality version of Resident Evil 4, which Oculus Studios published before Meta bought the developer. According to Gematsu, Armature did not release any games after the acquisition. The studio’s earlier credits include Batman: Arkham Origins Blackgate and Where the Heart Leads.

Implications for VR Gaming

The closures reduce the number of first-party studios producing exclusive content for Meta’s Quest headsets, which have relied on a mix of internal and outside developers to build their game libraries. Meta has positioned the Quest line as the leading consumer VR platform, and exclusive titles have been a key part of its pitch to buyers.

The cuts also add to a broader wave of job reductions across the technology and video game industries, where companies have been reorganizing around artificial intelligence and trimming divisions that have not delivered expected returns.

Meta did not immediately detail how many employees at each studio were affected or how the remaining Reality Labs teams would be reorganized. The company has said it remains committed to virtual and mixed reality while placing a greater emphasis on glasses and other wearable hardware in the year ahead.

Industry observers will be watching whether Meta continues to fund third-party VR development at previous levels, and how the shift affects its roadmap for future Quest headsets.