Meta shut down Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard's Wrath), and Armature Studio (Resident Evil 4 VR).

The New York Times reported earlier that Meta is laying off more than 10% of its Reality Labs division, specifically targeting teams working on VR and Horizon Worlds.

Now, UploadVR can confirm that these layoffs are being conducted today, and we've seen a document indicating the entirety of three of Meta's acquired VR games studios are affected: Twisted Pixel Games, Sanzaru Games, and Armature.

Twisted Pixel Games was founded in 2006 and mostly made Xbox games published by Microsoft for the first decade of its existence. In fact, Microsoft owned the studio from 2011 until 2015, when it became an independent company again.

On contract from Facebook, between 2017 and 2019 Twisted Pixel released four VR games:

• Wilson's Heart (Rift): a 2017 black & white psychological horror game with voice acting from Peter Weller, Alfred Molina, Rosario Dawson, and Michael B. Jordan.
• B-Team (Go/Quest): a 2018 collection of minigames, including a running game where you avoid obstacles and a wave shooter, ported to Quest in 2020.
• Defector (Rift): a 2019 action-packed spy thriller reminiscent of Mission: Impossible.
• Path of the Warrior (Rift/Quest): a 2019 brawler, essentially a first-person VR take on games like Streets of Rage, Final Fight, or Double Dragon.

In 2022, Twisted Pixel Games was acquired by Meta. And just two months ago, it released what it had been working on since then: Deadpool VR, the latest Quest-exclusive VR blockbuster.

That Meta is shutting down the studio already strongly suggests the $50 exclusive did not sell as well as the company had hoped, or that it didn't spur enough new Quest headset sales, the real purpose of Meta's high-budget content.

Sanzaru Games was also founded in 2006, and made a combination of its own games and contract titles for companies such as Sony, porting the original God of War series to PS Vita.

Sanzaru Games was also contracted by Facebook to build VR games for the Oculus Rift and its Touch controllers, between 2016 and 2019:

• Ripcoil (2016): a launch title for the Oculus Touch controllers that was essentially an active VR take on Pong, where you leaned your body to catch and throw a cybernetic frisbee.
• VR Sports Challenge (2016): another Oculus Touch launch title that featured football, basketball, hockey, and baseball, hoping to be the Wii Sports of early PC VR.
• Marvel Powers United VR (2018): Facebook's 2018 blockbuster title for Rift+Touch, featuring 18 playable Marvel superheroes and online multiplayer co-op. Meta shut down the game in 2020, and while a fan project brought back singleplayer in 2024, Meta got it taken down.
• Asgard's Wrath (2019): one of the meatiest made-for-VR games of all time, Facebook's 2019 Rift exclusive and Oculus Link launch title, an action-adventure RPG with over 30 hours of gameplay.

In 2020, Sanzaru Games was acquired by Facebook, and in 2023 released Asgard's Wrath 2, taking the core essence of Asgard's Wrath to Quest 2 and Quest 3 standalone, with a semi-open world and a campaign more than 60 hours long.

Exactly one year ago, Sanzaru released the last major content update for Asgard's Wrath 2, stating that it was now working on the “next big thing” with no detail released on what that would be before the studio closed.

Founded in 2008, Armature Studio was mainly a porting studio, bringing PC titles to consoles and console titles to PS Vita.

Like Twisted Pixel and Sanzaru, Armature too was contracted by Facebook to build early consumer VR games:

• Fail Factory (2017): a whimsical puzzle game for the Samsung Gear VR where you complete tasks in a cartoon robot factory. It was later ported to Oculus Go, Rift, and Quest.
• Sports Scramble (2019): a launch title for the Oculus Quest and yet another hopeful "Wii Sports of VR", it included tennis, bowling, and baseball.
• Resident Evil 4 VR (2021): By far Armature's most significant VR project was porting Resident Evil 4 to Quest 2, one of the first major traditional games to arrive on standalone headsets.

Armature was acquired by Meta in 2022, and many VR gamers had been eagerly anticipating what it had been working on since. Whatever it was, Armature too is now shut down.

These are not the first acquired VR game studios Meta has eliminated.

In 2024, the company shut down Lone Echo and Echo Arena creator Ready At Dawn. And last year it merged Onward developer Downpour Interactive into Camouflaj, the developer of Batman: Arkham Shadow, after ceasing development of the VR shooter.

According to the document UploadVR saw, four game studios still remain active at Meta:

• Beat Games (Beat Saber)
• BigBox (Population: One)
• Camouflaj (Batman: Arkham Shadow)
• Ouro Interactive (Super Rumble, Super Strike)

Beat Saber and Population: One are live service games, and there's no indication of a sequel arriving for either. For Camouflaj, four months ago the voice actor for Commissioner Gordon confirmed that a Batman: Arkham Shadow sequel was about to enter development. It's unclear whether this is still happening, though UploadVR can confirm that Camouflaj is not on the complete shutdown list.

The closure of three studios is part of a wider strategy shift at Meta, seeing funding from VR reallocated toward smart glasses, a reaction to the sales momentum the company saw last year for each type of device.

Through at least the first three quarters of the year, Quest headset sales were down compared to 2024. Meanwhile, sales of Ray-Ban Meta glasses skyrocketed, with several variants selling as fast as they can be manufactured.

Last month, Meta officially confirmed "shifting some of our investment from Metaverse toward AI glasses and Wearables", and the closures of Twisted Pixel, Sanzaru, and Armature are some of the first casualties of this shift.

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