Meta has begun a major shake-up inside its Reality Labs division, cutting hundreds of roles and closing multiple internal game studios as the company shifts priorities for 2026. The changes are part of a broader restructuring effort that, according to reports citing an internal memo and a company spokesperson, is designed to move investment away from metaverse-focused spending and toward wearables.
The layoffs reportedly impact more than 1,000 jobs overall and have already resulted in the shutdown of three VR game studios: Twisted Pixel, Armature, and Sanzaru.
Twisted Pixel is especially notable right now because it recently shipped Deadpool VR, a Meta Quest exclusive that launched on November 18, 2025. The timing makes the closure stand out: the game has been on the market for less than two months. Deadpool VR is priced at $49.99 and is available only on Meta’s Quest 3 and Quest 3S headsets. It also appears to have been well received by players, holding a 4.6 out of 5 star rating on the Meta Store.
Armature, another studio affected by the shutdowns, is known for bringing Resident Evil 4 to VR, while Sanzaru developed major VR titles such as Asgard’s Wrath and Marvel Powers United. Together, the closures mark a big pullback from Meta’s in-house VR game development pipeline at a time when the company continues to push the Meta Quest platform as a key part of its consumer hardware strategy.
Even with these studio closures, Meta says it is not stepping away from gaming. The company has described gaming as a cornerstone of its ecosystem, but its future spending will reportedly lean more heavily toward third-party developers and external partners rather than expanding its own internal teams.
With Twisted Pixel, Armature, and Sanzaru now shut down, Meta is left with five gaming studios: Beat Games, BigBox, Camouflaj, Glassworks, and Ouro. For Quest 3 and Quest 3S owners, the big question going forward is what this new strategy means for exclusive VR titles, long-term support for recent releases like Deadpool VR, and how quickly outside developers can fill any gaps left by fewer first-party studios.
