Meta layoffs mean big cuts in VR gaming, as 3 studios close

Meta, the parent company of Facebook, made major cuts to its workforce on Tuesday, including an estimated 10% of employees in its Reality Labs division, which is said to affect more than 1,000 workers. The Reality Labs business used to be known as Oculus VR, and makes products like the Meta Quest VR headsets and AI-powered glasses.

Those cuts have reportedly affected three gaming studios within Meta: Armature Studio, Twisted Pixel, and Sanzaru Games.

On Tuesday, employees at those studios began speaking about being laid off from the company. Andy Gentile, a designer at Twisted Pixel, said on X, “I’ve just been laid off. It appears the entire [Twisted Pixel] games studio has been shut down.

[Sanzaru Games] too.”

Kathryn Yu, a VR gameplay designer at Twisted Pixel, posted a similar announcement on Bluesky. Veteran game designer Ray West posted on LinkedIn that “several Meta game studios were closed today, including Sanzaru.”

According to a report from Bloomberg, citing an internal memo at Meta, Armature Studio has also been shuttered.

Reached for comment, a Meta spokesperson confirmed that reporting on studio closures as part of the Reality Labs cuts was accurate, and provided the following statement to Polygon. “We said last month that we were shifting some of our investment from Metaverse toward Wearables,” Meta’s Tracy Clayton said. “This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”

Twisted Pixel is known for its work on Xbox Live Arcade and Kinect games like ‘Splosion Man, LocoCycle, and The Gunstringer. The Austin-based studio was acquired by Meta in 2021, and last year released Marvel’s Deadpool VR for Meta Quest.

Sanzaru Games developed multiple games for PlayStation, including collections based on God of War and Sly Cooper, before being acquired by Oculus Studios (part of Meta) in 2020. At Meta, Sanzaru developed the ambitious Asgard’s Wrath VR games.

Armature Studio was founded by former Retro Studios leaders, and developed games like Batman: Arkham Origins Blackgate and ReCore. The studio flirted with VR fare like Fail Factory! and Sports Scramble, and developed the VR version of Resident Evil 4 before being acquired by Meta in 2022.

Meta’s Reality Labs has incurred losses of more than $70 billion since 2020, and appears to now be in the business of cutting its losses. The company has previously acquired and shuttered studios like Ready At Dawn and Downpour Interactive.