Meta has closed three of its virtual reality game studios—Sanzaru Games, Twisted Pixel, and Armature—as part of a strategic transition towards artificial intelligence (AI) and wearable technology. This shutdown has led to substantial layoffs within the affected studios, which were known for creating well-liked VR titles.
On January 13, developers from Sanzaru and Twisted Pixel publicly acknowledged their layoffs on social media. A representative from Meta subsequently confirmed the closures, which included Sanzaru, noted for “Asgard’s Wrath 2,” Twisted Pixel, which was in the process of developing “Deadpool VR,” and Armature, celebrated for its VR adaptation of “Resident Evil 4.” In an email to Kotaku, Meta remarked, “We indicated last month that we were reallocating some of our investment away from Metaverse toward Wearables. This is part of that initiative, and we aim to reinvest the savings to foster the growth of wearables this year.”
The response from impacted employees illustrates the abrupt and significant nature of these layoffs, with developers showing appreciation for their teams and sharing their stories online. Senior designer Ray West shared on LinkedIn about the closure of Sanzaru, while another developer announced the shutdown of Twisted Pixel on Twitter. Gameplay designer Kathryn Yu also recounted her personal experience of being laid off from Twisted Pixel.
This action aligns with Meta’s broader strategy to shift focus away from VR and the metaverse toward AI and augmented reality technologies following difficult financial outcomes. Recent reports indicated that the VR sector, encompassing Reality Labs and employing around 15,000 individuals, incurred losses amounting to $4 billion. As part of this shift, Meta intends to reduce 10 to 15 percent of its Reality Labs workforce.
Sanzaru Games, acquired by Meta in 2020, had received praise for “Asgard’s Wrath,” a critically acclaimed role-playing game released in 2019. The studio was developing a sequel slated for the launch of the Quest 3 in December 2023. Twisted Pixel, recognized for titles such as “Splosion Man” and “Lococycle,” was acquired in 2021 with a focus on VR content. Armature, purchased by Meta in 2022, was acknowledged for its contributions to popular titles across various platforms and had most recently finalized the VR port of “Resident Evil 4.”
As Meta alters its course, the ramifications for the skilled developers at these studios underscore the unpredictable nature of the tech industry’s changing landscape.
