[STEAM] Meta Shuts 3 VR Studios and Lays Off Hundreds of Devs as It Pivots From Virtual Reality and the Metaverse to AI

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Meta is laying off around 10% of staff at its Reality Labs division as part of sweeping cuts set to affect more than 1,000 people. This includes the closure of a number of VR-first studios, such as Twisted Pixel, the studio behind

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,

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developer Armature Studio, and

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maker, Sanzaru Games. According to

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, the cuts come as Meta pivots away from the Metaverse towards AI, phones, and wearable tech.

The cuts come just over four years after

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changed its name to Meta and went big on virtual reality and the Metaverse.

Letters reportedly went out yesterday (Tuesday, January 13) morning, and developers from the impacted studios shared their shock on social media throughout the day.

"I've just been laid off. It appears the entire Twisted Pixel games studio has been shut down.

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Sanzaru Games, too," one now former member of staff

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, while a designer

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: "unfortunately, I was part of the layoffs today at Meta, and will be seeking a new role. To my Twisted Pixel Games family: it was an honor to work alongside you for 3.5 years and ship Marvel's Deadpool VR. We made something really special together and no one can ever take that away."

Twisted Pixel is the studio behind a number of popular Xbox Live Arcade games, such as 2009's The Maw and 'Splosion Man. It became a part of

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Studios in 2011, and went on to release Xbox 360 Kinect-exclusive shooter The Gunstringer, and Xbox One game LocoCycle, before becoming an independent company again in 2015 and moving into VR game development.

Meta only acquired

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and Twisted Pixel

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, and

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. However, it is now seemingly shedding much of its internal VR business as Meta scrambles to recover billion-dollar losses and pivot to AI.

In a statement, Meta confirmed the three studio closures: "we said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year."

According to

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, CEO Mark Zuckerberg prioritized and spent heavily on the Metaverse, only for the business to burn more than $60 billion since 2020. The Reality Labs business also produces Meta's Quest mixed-reality headsets. According to

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, Meta isn’t abandoning VR entirely. It is now courting developers who build games for Roblox to build experiences for Horizon Worlds.

Vikki Blake is a reporter for IGN, as well as a critic, columnist, and consultant with 15+ years experience working with some of the world's biggest gaming sites and publications. She's also a Guardian, Spartan, Silent Hillian, Legend, and perpetually High Chaos. Find her at

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