Meta Shuts Down Two VR Studios Amid Reality Labs Cuts
Meta has announced a significant reduction in its Reality Labs division, resulting in the closure of two prominent virtual reality studios: Twisted Pixel Games and Sanzaru Games. This move comes as part of a broader 10% workforce reduction within Reality Labs, the division responsible for Meta’s VR and Metaverse projects. The news was initially revealed through a report by the New York Times and later confirmed by developers affected by the layoffs.
Details on the Studios and Impacted Teams
Twisted Pixel Games, known for titles such as Deadpool VR, ‘Splosion Man, and Path of the Warrior, and Sanzaru Games, the studio behind the acclaimed Asgard’s Wrath series, have both been shuttered with their entire teams laid off. Andy Gentile, a designer at Twisted Pixel, shared on his X (formerly Twitter) account that not only was he laid off, but the entire studio had been closed. Similarly, Ray West, a senior designer at Sanzaru, confirmed the closure on his LinkedIn page, praising the talent and camaraderie within the team.
Sanzaru Games holds a special place in gaming history, having also worked on beloved PlayStation franchises. The studio was responsible for porting the first three Sly Cooper games to PlayStation 3 and PlayStation Vita, as well as developing the fourth game in the series, Sly Cooper: Thieves in Time. Additionally, they handled ports for the God of War Collection and Secret Agent Clank. Their Asgard’s Wrath titles have been widely regarded as some of the best VR experiences in recent years.
Context and Industry Implications
Both Twisted Pixel and Sanzaru Games were founded in 2006, meaning they were approaching their 20th anniversaries—a significant milestone that few studios reach in the volatile video game industry. The closures mark a disappointing start to 2026 and highlight the ongoing challenges faced by game developers amid widespread layoffs across the sector. Meta’s decision underscores the difficulties in sustaining large-scale VR development efforts despite growing interest in the Metaverse and virtual reality technologies.
Looking Ahead
With these closures, Meta appears to be streamlining its Reality Labs division, potentially refocusing resources on other projects within the VR and Metaverse space. Industry watchers will be keen to see how Meta adjusts its strategy moving forward and what this means for the future of VR gaming under its umbrella. The fate of other internal studios and projects within Reality Labs remains to be seen as the company navigates this period of restructuring.
For now, the shutdown of Twisted Pixel and Sanzaru Games serves as a stark reminder of the challenges facing VR developers and the broader gaming industry in an uncertain economic climate.