70 billion dollars down the drain. Meta pulls plug on Reality Labs, and a thousand people lose their jobs

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January 15

A recent YouTube video by GamerTag VR revealed that Meta has shut down several studios and also scrapped a virtual reality version of Harry Potter that was in development with Skydance. The closures also impacted Camouflaj, the studio behind Batman: Arkham Shadow, forcing them to lay off staff and halt work on unannounced projects.

Original news (January 14)

Even Mark Zuckerberg may be losing confidence in the metaverse. This is strongly suggested by Meta’s recent large-scale layoffs within its VR gaming division.

  1. Over a thousand employees from Reality Labs, the team handling virtual reality at Meta, are expected to lose their jobs. This constitutes about 10% of the entire staff of this department.
  2. The reductions will result in the closure of three development studios: Armature Studios (known for the VR version of Resident Evil 4), Sanzaru Games (creators of the Asgard’s Wrath series), and Twisted Pixel (creators of games like Defector and Deadpool VR).
  3. In a media comment, a Meta spokesperson said that the cuts are part of a plan to dial back on metaverse investments and instead focus more on wearables, like AR glasses, and boosting AI development.
  4. Meta doesn’t intend, at least for now, to completely abandon VR, but these layoffs are meant to ensure savings that will make this division of the company profitable in the long run. The company is planning to dive deeper into mobile metaverse stuff, but they’ll still be working on new VR headsets, just not as quickly.

The latest reports confirm that the metaverse hasn’t been successful. Mark Zuckerberg was convinced it would be the next big thing online, so he rebranded Facebook as Meta. Unfortunately, the idea hasn’t gained traction, and Meta’s Reality Labs division has lost more than $70 billion since 2020.

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2026-01-15 15:08