Meta, the parent company of Oculus Studios, is closing three virtual reality game studios as part of a broader restructuring of its Reality Labs division. The move comes as the company reduces its VR/AR workforce by approximately 10 percent, with affected employees sharing news of their layoffs on X and LinkedIn.

The studios impacted by these closures are:

• Sanzaru Games – Developer of Asgard’s Wrath
• Twisted Pixel Games – Developer of Deadpool VR
• Armature Studio – Developer of Resident Evil 4 VR

Meta acquired Sanzaru Games in 2020, and both Twisted Pixel Games and Armature Studio in 2022. A company spokesperson confirmed the closures, stating, “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.”

Both Sanzaru Games and Twisted Pixel Games have received industry recognition for their VR titles, including nominations for the Academy of Interactive Arts and Sciences’ DICE Awards. Sanzaru Games won the Immersive Reality Game of the Year award at the 2024 ceremony.

Since its formation in late 2021, Meta Reality Labs has faced ongoing financial challenges, including multi-billion dollar losses and annual layoffs. In 2024, the division also closed Ready At Dawn, the studio behind the Echo series. Despite these setbacks, Meta has seen success with the sale of millions of Quest headsets and the achievements of its VR developers.

Interest in virtual reality devices has slowed, even as Meta invested heavily in building the “metaverse,” which led to the development of the online multiplayer game Horizon Worlds. The platform has struggled to gain traction, and in 2023, Meta began marketing it to teenagers. In 2025, allegations surfaced from current and former Meta researchers claiming the company suppressed reports of child abuse within Horizon Worlds, a claim Meta has denied.

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